Navigating this past year as a business owner has been rough. Plenty of people have had to make changes or cuts to stay afloat, and now many are wondering if it’s worth it to keep their doors open.
Selling a business isn’t a simple matter. There are so many factors to consider, and the business selling process may not be as simple as you’d think.
There’s no easy answer we can give you if you’re thinking of selling a small business. However, we can give you the tools you need to make a sound decision. If you’re thinking about selling your business, there are 5 very important things to consider.
1. Value
It’s important to remember that revenue and value are two very different things in the business world. Don’t even think about selling your business until you understand its true value.
There are plenty of business valuation methods you can use to determine value. However, the most basic place to start is by thinking about cash flow and assets. If you’re feeling stuck, now is the perfect time to work with an accountant or someone in finance.
2. Motivation
Some people built their business with the ultimate goal of selling it. Others have fallen on hard times and think selling is the best option. Regardless of your reasoning, it’s important to think about your true motivation for selling.
Do you think that the market is right and you want to cash in while the getting is good? Have you lost your passion for running the business and want to move onto something else?
Now is the right time for honest. Take the time to think about why you want to sell. That may let you know if you’re making the right decision.
3. Potential
Don’t think that selling your business is automatically the right thing to do if you’re in a tough spot financially. Things could be bad today, but will they be bad tomorrow?
Take a look at the market and think about potential opportunities. Could you fill a space that your competitors currently can’t? Would a few loans or an investor help turn your business around? Think hard about potential options before you make up your mind to sell.
4. Total Loss
When business owners decide to close their doors, they’re doing a lot more than just losing out on potential revenue. Depending on certain agreements you have, you could be losing more than just your business.
Do any of your employees have contracts that stipulate that they get severance pay? Would you be on the hook for any orders or services to current customers? It may be worth staying a business a little while longer to help save you money.
5. Timing
Selling a business is never a quick fix, and that’s especially true in a sluggish economy. Selling off a business could take months or even years, and that’s even true if you have interested buyers.
If you’re trying to fix a pressing problem, it may be worth looking into alternative means to get what you want. People that are willing to play the long game may find that selling is their best option.
The Truth About Selling a Business
There are no easy answers when it comes to selling a business. What’s right for you may not be right for someone else. Luckily, when you take the time to consider important factors, the decision gets a little easier.
Are you interested in more business content? We have plenty of posts on our site for budding entrepreneurs. Be sure to browse our business posts so you can get the insight you need into important topics.
