This article was originally created on the 19th of February 2017.
In this article we want to discuss the invisible signs that a business sale could be on the horizon for you. In order to do that, we need to look at the usual reasons that prompt a business sale, but also, the emotions of it.
Think back to the time when you started your first ever paid job. How excited you were to be independently earning your own income. Master of your own destiny (to a point). Financially able to make your own choices. It’s was a rush of excitement.
Now think about the time you established or took ownership of your business. A lot of the excitement you felt were the same. The thing that makes these two experiences very different are the emotions you attach.
Leave your job, and your emotions focus on your new role and the prospects it brings. Leave your business and your emotions are focused on what you leave behind.
Your business is something you have created, nurtured, watched grow and become successful. It’s like watching your firstborn head off to university.
You worry about how your business will get on with a new owner at the top. You worry about the staff and friends you have left behind. You worry if you are still needed. You worry if you are making the right decision.
Selling a business is not a clinical as many may thing. There are many emotions attached to it and you need to know if you are prepared for your sale. This short video explains.
Looking for a handy checklist that will walk you through all that’s needed when preparing your business for sale? We’ve created one with all you need – and you can download it here.
Expected reasons to sell your business
There are some common reasons that drive the sale of a business. These include;
- ill health or family care issues
- a desire to move onto a new challenge
- the business outgrows the owner’s capabilities or comfort zone
- a significant shift in the market necessitates it
- poor performance / insolvency
- relocation forces the decision
And on the more positive side
- you are approached by a buyer at a price you will accept
- the business has hit the growth targets you had aimed for and so it is time to cash in
The 5 invisible indicators it might be time to sell
These 5 things are like tells in a game of poker. They indicate that something is a little out of balance and that selling your business may well be the next decision you make. We also give you some alternatives to the sale option. Here goes;
1. You struggle to get up in the morning
The shrill tone of the alarm clock fills you with dread. You hit snooze for the umpteenth time. It was never this difficult to summon enthusiasm for your enterprise in the past, so why are you finding it so hard to get motivated now?
Business has turned from something that excites you to something that bores you. When people don’t fully enjoy the position they are in, apathy begins to set in. Crucial decisions or deadlines might be delayed causing problems elsewhere within your staff. You become a bottleneck.
You need to recapture the romance of business. You could expand into new markets or new geographical regions, recapturing the feelings you had when first launching. New product development often fills this gap too.
If you can do neither of these, creating in a CEO position to take over the running of the business whilst you retain ownership and draw dividends could be a good alternative.
2. Other people’s work is just not good enough
As a perfectionist, the standard of your employees’ work is just not up to scratch. Consequently, you’re reluctant to delegate, hire people and prefer to be in sole control of your business, no matter how exhausting that is.
Controlling every aspect of your business is not a bad trait to have, but it is really not helpful during a sale.
What will result is a business that reaches a ceiling past which is cannot progress, stifled by the number of hours you are able to work personally.
When a business is establishing and growing fast, recruitment is not always executed well. The first place to start is with an employee review. There may be some excellent people in your employment, but they’re just not sitting in the right desks. Consider having a cabinet style reshuffle to get the best out of everyone.
The second alternative is to outsource. If you can’t find the trust and quality you need within your staff, look outside. Outsource specific roles to free up your time.
With time to focus on the strategy of your business instead of the ‘daily grind’ you may rekindle your passion for it and get back some balance.
3. You disagree with your business partners
You’re an equal partner in the business but you don’t share the same views on future plans. Board meetings end in dispute and your partnership becomes acrimonious. You begin to think there’s nowhere for you to go but ‘out’.
Just like a marriage, there are mediation services specifically for business relationships. There’s no need to suffer in silence when external support is available. Enlist the help of a business mediator or mentor to help you all navigate through this tricky situation.
4. Your business bores you
Try as you might, you just can’t rekindle the love you once had for your business. It once had you hooked but your relationship has well and truly fizzled out.
There are one of two ways to go here. Delegate everything that bores you either to your general staff or look at appointing a management team to share the workload.
Second is to diversify in a way that rekindles your passion in a new direction. Think of your business like a Harrods department store. You don’t only have to sell food, you can diversify into clothing, homewares, technology. There’s restaurants, bars, travel agent and wedding planner facilities. In what direction could your business diversify that would rekindle your interest?
5. You’re not achieving financial success
Cash flow is not looking healthy; your customers are not paying on time and you feel like you’re wasting your own time chasing debt instead of developing new business.
It probably won’t surprise you that no.4 is a big contributing factor to this financial stress. As you tire of your business, you begin to be less reactive and that is often where things start to slide.
Every business deserves customers that respect the company they buy from. Create the profile of your ideal customer and make a plan to target them. Think about extending credit terms with your suppliers to ease any cash flow worries and prioritise those overdue invoices.
The reality of business is that you will fall in and out of love with it on many occasions and for many reasons. A successful business owners learns how to recognise when these cycles are happening and learns to adjust their course quickly.
Ultimately, if you do decide there is no way back and you want some advice around business sales, please get in touch.