As an entrepreneur, your business is an extension of yourself and your vision come to life. You’ve poured a lot of blood, sweat and tears into building it from the ground up. The decision to sell it may well be one of the toughest you’ll ever make.
Even if you don’t plan to sell your business in the foreseeable future, you should still plan for your eventual exit. Asking yourself these three key questions can help you determine whether you’re ready to sell.
Are you mentally prepared to sell your business?
Entrepreneurs seldom relish the idea of selling their business. Few are ever psychologically ready.
There may be any number of reasons you’re reluctant to sell your business.
- You may enjoy it too much.
- You may worry that a sale won’t bring much return.
- You wonder whether the business can continue without you.
- You’ve invested time, finances and other resources to make your dream a reality.
- You’ve weathered storms and fluctuations in the market, and you’ve come out the other side.
Regardless, failure to prepare carries consequences for those who depend on you. If you were to fall ill or die, lack of a succession plan could adversely affect your family. By laying out your exit strategy, you can begin to process the actions you need to take to move on. Succession planning brings closure by
- identifying ways to keep your business legacy alive
- addressing concerns about generating good value from a sale
- preparing you mentally and emotionally for what comes next
Do you have anything more to give?
Has your company become stagnant? Has growth come to a standstill? Have you run out of new or innovative ideas?
If you answered yes to any of these questions, you may have lost the drive to take your business to the next level. You may be hesitant to make crucial investments or decisions to help your business grow. You may be reluctant to delegate responsibility. Whatever the issue, consider the root cause. It may be a sign that it’s time to sell.
Are you positioned to sell?
To attract buyers willing to pay the price you want, you company has to be positioned to sell. It must have
- capable management
- a history of profitability
- a solid and loyal customer base
- effective, streamlined processes
- a plan for future growth and sustainability
- proven methods of generating steady revenue
Documented, repeatable business processes, coupled with capable management and motivated employees, ensure that personnel can consistently run the business without your help.
The above speaks to internal factors. Consider also external factors that can affect your readiness to sell. These include
- advances in technology
- fluctuating market conditions
- changes in legislation, regulations or foreign trade agreements
Contemplating selling your business? Look to Lift Legal’s experienced team of business lawyers for your corporate legal needs. Contact us today to discuss your succession plan and exit strategy.