Continuing our subject of The Right Time To Sell Your Business, I outlined some sure signs.
1. You notice you are attending more funerals than weddings. Getting older or hitting retirement age is probably the leading reason our clients decide to sell their companies. We also hear from our clients the death of a colleague or family member spurred them to the decision to sell.
2. Your idea of a risky investment is a 3-year T-Bill.
Think back to when you started your business: you took a big risk and part of your success was attributable to your willingness to take such risks. As we age, we naturally become more risk averse. However, the continued growth of your business is dependent upon you taking more risks. Your declining tolerance for risk-taking may have the unintended consequence of stifling the growth of your business. If you are afraid to buy green bananas, it is time to sell.
3. The biggest change in your life is switching from Frosted Flakes to Corn Flakes.
As you have aged as an owner, not only have you lost your tolerance for risk, you probably have lost your propensity to accept change as well. We all know as we get older, we tend to get more set in our ways. Unfortunately, businesses are not static; they are always changing. If you cannot consistently embrace change, you risk the success of your company.
4. Your business partner announces her/his intention to quit, get a divorce and move to Maui with her/his massage therapist.
Partnership/shareholder issues and disputes are a common cause for the sale of businesses. What started as a beautiful partnership often deteriorates into a dysfunctional relationship as the company and its shareholders prosper.
5. That stranger asking you for a job is your own child.
One of the most common reasons owners tell us they want to sell is to spend more time with their families. Owners understand the huge sacrifice they make to run their companies. These sacrifices include time with their families, time they may be unwilling to give up as the years go by.
6. Your last vacation happened when Bill Clinton was in the White House…and it included a trade show.
Many business owners think they cannot afford to take a day or two away from the business, let alone a full vacation. If your last vacation was taken when you were in college or involves an extra day added on to a business trip, it may be time to think about getting out of your business.
7. Your children tell you, “We like the business, but we do not want to get our hands dirty.” In many instances, unfortunately, your kids were not around when you were struggling with starting your business. They only remember the good and prosperous times. Many business owners expect their kids to take over the company from them…but their kids do not always share the same aspirations.
8. Your blood pressure and cholesterol levels have more peaks and valleys than the Rocky Mountains.
Health issues are a common factor influencing a business owner’s decision to sell. It is definitely better to sell when you are in good health than the alternative.
9. Through experience, you actually understand the US Tax Code, OSHA regulations and ACA rules.
Do you remember when running a business was almost easy? When the only time you dealt with the government was when you filed your taxes? For many of my clients, dealing with local, state, and federal governmental regulators and rules takes up a disproportionate amount of their time each day. I cannot count the number of clients who say they are selling because they are tired of dealing with ever-increasing governmental regulations and taxing authorities.
10. You spend more time meeting with your HR director than your sales manager.
Personnel issues take up an inordinate amount of time for most business owners. Because of this drain on their time, many business owners do not get to do the things they enjoy most in their business. Several of my clients have become so frustrated with personnel issues, they dream of owning a business with no employees!
I am happy to answer any of your questions regarding this subject or any previous articles. In my next article, I’ll discuss the subject: What Are Hockey Sticks and Why Are They Important to Business Sellers & Buyers.
