Should you sell your business? It’s a big question and one that you’ll eventually have to make at some point in your life as a businessperson.
But how do you make up your mind? The purpose of this post is to help. We run through some of the pros and cons of selling your business so you’re in a better position to make a decision. Read on to learn more.
Pros Of Selling
You Can Cut Your Losses
If your business is loss-making and you can’t see a way out, then you might want to get out while your balance sheet is still healthy. This way, you can get a higher business valuation and you don’t have to worry so much about sunk costs — the buyer covers those.
Remember, there may be people out there who can turn your business around. This means that your existing staff and suppliers can keep their jobs.
It Frees Up Your Time
While some owners are completely hands-off, such setups are rare. Most are involved in the day-to-day running of their enterprises. They can’t just have a day off here and there when they feel like it. And they certainly don’t have the energy to pursue other projects.
When you sell, though, you liberate all that pent-up energy. Suddenly you have all the free time in the world to pursue other things, such as a new startup or even a regular job as a salaried employee.
Keep Your Profits
If you’ve made a profit, that might be a great time to sell, particularly if you expect that the market will change for the worse over the coming years. Selling now while you have three or more years or solid profits on your books could be a great way to get the most money possible for your business before the industry or wider society turns a corner.
Cons Of Selling A Business
Loss Of Revenue
While you’ll receive a large lump sum for your business, you’ll lose the recurring revenue it generates. As such, you may need to supplement your income from elsewhere, such as your regular paid job or by investing in other firms. If you don’t have experience with the latter, you may wind up making mistakes.
You Give Up Control
Many owners see their businesses as their babies. They’re not just a way to make money: they represent their time, effort and life’s work. It can be hard to let it all go or allow someone else to take over the running of it.
When you sell a business, therefore, you’ll need to think carefully about the emotional impact of letting it go. Once the buyer transfers the money, you can no longer make critical decisions about your brand’s direction: that’s now somebody else’s choice. All you can do is stand by.
It Takes A Long Time
Lastly, selling a business can take a long time. The number of buyers actively interested in companies like yours is probably quite small, and finding them can be difficult.
