Saying Goodbye to Your Small Business: Signs It’s Time to Sell

Saying Goodbye to Your Small Business: Signs It's Time to Sell
© Andrea Piacquadio

Entrepreneurs sell their businesses for a number of reasons, but some of the more common ones range from burnout and boredom to business growth and declining revenue. And while selling a business comes with several advantages and disadvantages, knowing when to sell is the trickiest part. Check out this article presented to you below by Markets Herald to explore some of the telltale signs it’s time to sell your small business — and learn about the steps you should take to prepare for the sale.

Signs It’s Time to Sell Your Business

After you’ve worked so hard to build your business, making the decision to sell it likely won’t come easily. However, Denise Hill of Wise Bread shares four telltale signs it’s time to make a plan to sell. These include risk aversion, burnout, lost drive and passion, and the desire to try something new.

If you’re no longer comfortable taking risks or exploring new opportunities that could grow your business, for instance, it may be time to sell your company before business stagnation occurs. Or if you’re simply too tired, unmotivated, or drained to run your business after so many years of entrepreneurship, it might be time to plan your exit strategy before things go south. In other cases, you may be ready for retirement or a change in your career — and selling your business will provide you with the freedom to tackle new challenges.

Preparing to Sell Your Small Business

Once you’ve made the decision to sell your business, you’ll need to start planning your exit strategy. Timing is crucial to increasing your return on investments, and it’s best to sell when business is still good rather than selling during an economic downturn. Here are some of the steps you’ll need to take when preparing to sell your business:

  • Conducting a business valuation with help from an appraiser.
  • Gathering your financial documents, including tax returns, balance sheets, cash flow statements, and income statements from the past four years.
  • Making a list of the business supplies and equipment you’re looking to sell with your company. Alternatively, some companies buy used printers and copiers.
  • Documenting any major changes to your company in your annual report, including changes to your business name, address, membership, or shares. If you do not accurately file an annual report before your state’s deadline, you could face penalty fees or lose your right to do business in the state.
  • Looking for ways to increase profitability and reduce business costs. One area could be your company’s invoicing software. Staying on top of delinquent accounts and bringing them current can improve your business’s finances.

It’s also important to find the right buyer when preparing to sell your company, especially if you care about the future of the business. Though you won’t be a part of the business moving forward, the last thing you’ll want is to leave the company in the wrong hands and have regrets about it later. TKO Miller shares some tips for targeting and attracting the best buyers for your small business.

Final Words

Even when you know you’re ready to let go of your company and pursue something new, it’s normal to experience some feelings of sadness and loneliness after selling a business. After all, you’ve spent the past few years wearing many different hats, and much of your identity has been wrapped up in the business you’ve built.

It may take some time to adjust to life after selling, but it’s important to focus on your reasons for moving on. Selling a business isn’t the end of your career as an entrepreneur. For many business owners, selling is the start of something new, exciting, and rewarding.