5 Signs It Is Time to Sell Your Business

Some people choose to start a company as a means to bolster their legacy or create a product or service that will benefit their community. Others choose to start a company in the hopes that it would be sold one day for a large profit. What are some signs that it is the right time to sell your company?

You Receive an Offer That You Cannot Refuse

Let's say that your company was recently raised capital at a valuation of $1 million. If you think that your company has room to grow, you may attempt to raise more money at a $2 million valuation in six months. However, what if someone offered you $10 million to buy your entire company right now? Assuming that you aren't emotionally attached to your business or don't think that it will be a $10 million company in the next few years, it may be a good idea to sell today.

You Aren't Interested in Running the Company Anymore

At some point, you may realize that you don't have the passion for marketing, branding and sales that it takes to keep your company growing and thriving into the future. If that sounds like you, it is certainly in your best interest to sell the company. Otherwise, you could burnout and lose the will to innovate or foster a positive company culture. Ultimately, this could harm employee morale and lead to higher turnover and poor product or service quality.

You've Reached Your Goal as an Entrepreneur

When you start a company, you may have a firm goal in mind that you would like to achieve. For instance, you may want to create a niche product that will attract the interest of a larger company and led to a multi-million or billion dollar deal. In some cases, the point of starting a company may be to show that a new technology works or to raise awareness for medical research that may be able to save lives. Once you have achieved that goal, it may be best to sell your company and focus on the next goal that you have set for yourself.

You Don't See Eye to Eye with Other Partners

It is common for startups and other small companies to have multiple owners with an equity stake in the business. If a majority partner or a group of partners wants to franchise the company while you would rather stick to one location, it may be a good idea to sell and move on. Staying on with a business that you don't believe in could result in strained personal and professional relationships that may never be mended. It is also important to note that putting your stake in a carpet cleaning business for sale or any other business doesn't mean that either side is right or wrong. It is simply an acknowledgment that your philosophy differs from your partners.

You Have Found a Worthy Successor

The goal of any business owner is to find a successor who will run the business well and do right by the brand. If you have identified a person or group of people who are qualified to take over when you decide to retire, you should create a succession plan immediately. This may include selling your stake in the company to this group to make them both chief executives and owners of the business.

The worst thing that you can do is retain ownership of your company when you aren't fully invested in its success. Therefore, you should acknowledge when you have reached your objective for starting the company so that someone else can take over and carry on the company's legacy.