As the Kenny Rogers song goes, “You’ve got to know when to hold ‘em; know when to fold ‘em; know when to walk away.” These lines likely ring true for any small business owner.
Entrepreneurs start businesses to solve problems and put in a lot of blood, sweat, tears, and long hours in the process. Eventually, thoughts of selling come up. The decision to sell is not always the result of a problem within the business. There are many reasons entrepreneurs choose to sell. The founding partners may be ready to move on. It may be part of a long-term business plan or a necessity for financial reasons. Sometimes, it’s simply too difficult to keep up with the competition or changes in the marketplace.
Whatever the reason, selling is a big—and personal—decision that requires an in-depth look at the industry of the specific business, the market, existing and pending competition, and the individual company’s finances. Here are three signs that it may be time to walk away:
1. Lack of resources to take it to the next level
Just as starting a business takes capital, growing the business takes even more capital. Depending on the business, growth may require investing in new technology, adding employees, expanding skill sets, upping production, or anticipating market changes. Not all small businesses have the resources to take things to the next level.
If a business is poised for growth, it may attract possible buyers who can invest sufficient capital, bring in a new set of business acumen, and expand the business.
2. Founder burnout
Getting businesses off the ground is tough. It takes a lot of hard work, risk, sacrifice, and stress. Each stage of setting up a business comes with its own set of issues. In the early stages, founders often try to do everything themselves, and, later, it might be personnel issues. This can lead to the founders feeling burned out or simply ready for a change.
Feeling unhappy, unfulfilled or even exhausted may be signs that it’s time to sell.
3. An offer that’s too good to pass up
Entrepreneurs and small business owners may dream about Google or another large corporation buying their company and becoming billionaires. This might seem like a fantasy, but it’s possible that an offer might come out of nowhere and be too good to pass up.
Even if selling hadn’t seemed like a possibility, receiving an unexpected offer can give entrepreneurs the opportunity to evaluate their business plan, examine the market, and think about the future. If an offer is received, especially a multi-million dollar one, it’s a good idea to give it some serious consideration.
It’s best for the sale of a business to always be on the seller’s terms. Though this may not always be possible, entrepreneurs should remember all of their hard work as they look to sell, take stock of the business, and try to anticipate what’s best for the future of the business and business owner.