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MNP's TAKE: In light of the current economic downturn and slow business growth on a global scale, many business owners are looking to sell. While a well thought out succession strategy will increase the value of a business and reduce risk, more than 50% of owners admit they have no formal transition plan in place. This is not necessarily surprising given the amount of time, resources and energy put into meeting the needs of day-to-day operations. With that being said, It’s essential not to leave your succession plan until you’re ready to sell.
Business is multi-dimensional and so is an effective succession plan. To serve you best, your succession plan needs to not only address the myriad of issues involved in exiting your business, but lay the foundation to maximize the value of your business in the short- and long-term. It needs to be flexible to deal with uncertainties while providing you with a clear path that allows you to successfully exit your business on your own terms.
To learn more about how to successfully transition from your business, contact John Hughes, MNP's National Leader of Private Enterprise at 416.596.1711 or
BY BUSINESSVIBES FROM BUSINESS2COMMUNITY
Some people wait too long to sell their business, while others sell before they give it an honest chance. Here’s how to decide when it’s time to sell and when you should hold out just a bit longer.
You Can’t Fund The Company’s Growth Anymore
Sometimes, you get to a point where you’re either out of cash to expand your business or it’s not worth the risk. You could go get a business loan, or approach investors to raise funds, but this isn’t what every business owner wants to do.
Raising capital from the marketplace is difficult and can be expensive in and of itself. If a lack of a cash reserve is your problem, then maybe you should call experienced Florida business sale transaction attorney John Samaan and let another entrepreneur who does have money push the business forward.
Of course, you could sell and then retain a job within the new company if you’re adamant about staying in the business.
When The Business Runs Without You
Most small business owners set up their businesses so that everything hinges on them. If they left the office for a day, the business wouldn’t operate. They become the face of the operation, and they interact directly with customers.
But, if you’ve developed your company to the point where you’re no longer needed for day-to-day operations, then you can step back and let others run the company without you. At the same time, if you’re not needed to make the business run, it might be a good time to sell because what you’ve developed is a systems-based business.
Another manager could come in and run the company for you. That means another business owner could come in and take your place. That makes your company inherently valuable and a good deal for an up-and-commer.
When A Better Opportunity Comes Along
When you see other opportunities that are more profitable, or have a higher profit potential, it might be time to sell your old business and set up a new one. This happens a lot in industries where the business is dependent on trends that wax and wane over time. Maybe now is a time when your business is waning.
When Your Life Changes In A Major Way
If you’ve gone through a major change in your life, you might not be able to hold onto the business. For example, sometimes, the stress of running a company catches up with its owner.
That stress could cause health problems that force him or her into retirement.
Let’s say you run a busy restaurant. The constant stress of turning a profit and getting meals out on time has taken its toll on your health. You suffer a heart attack one night during dinner service. What now?
This isn’t the time to “tough it out.” It’s time to reassess your priorities.
That doesn’t always mean you have to sell. Maybe you need to slow down, though. If you do look for a seller, you might have to assess whether the business has any intrinsic value – can it run without you on a day-to-day basis?
If it can, then it has some inherent worth. It has cashflow that someone else can manage. Maybe you could hire a manager to handle the day-to-day operations while you take some time off.
If you find that you just can’t handle it though, it’s time to hang up your hat and move on to something less stressful.
When You Get A Once-In-A-Lifetime Offer
Sometimes, the perfect offer comes around and you’d be a fool to refuse. If you get an offer to sell that’s well above your company’s projected valuation, it’s probably time to sell the company. Many entrepreneurs tread lightly on these deals because they’re skeptical about the finalization of the transaction.
But, if a buyer is coming to you with a check-in-hand, why not sell?
You may never get a better offer than what you’re being offered right now. Either, you’re underestimating your company’s value, or another entrepreneur sees a way to make your company more profitable than you can.
When You’re Happy
The only time it’s appropriate to keep your business is when you’re happy doing what you’re doing. Many business owners love their work and love getting up in the morning. They hate weekends, and time off, because it takes them away from their passion.
For them, it’s not work. It’s their dream life. If this is you, then keep doing what you’re doing and don’t sell.
This article was written by BusinessVibes from Business2Community and was legally licensed through the NewsCred publisher network.
Related Topics:Selling a Business; Small Business
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