American Business Brokers & Advisor Founder & President PROFESSIONAL INTERMEDIARY & MARKET MAKER FOR PRIVATELY HELD COMPANIES Advisor • Consultant • Speaker Market Valuations Involved in Closing 500+Business Transactions & Over $500 Million Author of ‘The Art of Buying and Selling a Convenience Store’
The 7 Warning Signs P eople are emotional creatures. We make decisions based primarily on emotions, not logic, and business owners are no different. Sometimes, this means we form emotional attachments to our businesses that blind us to reality when it’s time to sell. We need to see past our emotional attachments and look for these seven warning signs that it might be time to sell our business. Otherwise, we set ourselves up for failure. You Have ‘The Thrill Is Gone’ Syndrome Even though running a business can have its frustrating days, it should be something you ultimately enjoy. But some business owners may find that even on their most profitable days, they aren’t happy at work. Another indicator of this syndrome is when slight inconveniences, such an upcoming audit, cause undue irritation. This is commonly called “burnout,” which can sometimes be fixed with a vacation. If that doesn’t work, it might be time to move on. You’re ‘Fidgeting’ With Your Business You should want to implement programs and changes that help your business become more profitable, but if you find yourself creating products and services without desiring them to be profitable, it might be a sign you should direct your interests and talents toward something else. Try looking for different fundraisers or other community building efforts that align with your interests, rather than holding onto a business you don’t care about. You’ve Outgrown Your Business Say your business is doing really well and you enjoy what you do, but you’re not at the income level you desire. If you have mastered the basics of running a business, and you feel comfortable stepping up to run a larger one, it might be time to sell your business and move onto the next thing. It’s tempting to stay with what you know, especially when it’s working well for you, but sometimes better things are ahead. Your Business Outgrows You This might be the most humbling indicator, and it happens constantly. Your industry might be growing faster than you are growing as a business owner, which is to say your talents might not be enough to get your business to its fullest potential. While it’s hard to recognize your own shortcomings as a business owner, it might be time to hand your business off to a more sophisticated party while you move onto another venture that better suits your talents.
That It Might Be Time to Sell Your Business
Your Industry is Declining Video rental stores used to be a big industry. But do you see any video
rental stores anymore? Nope! With the advent of Redbox, Netflix, and other streaming services, video rental stores are a thing of the past. Every industry matures, and, at some point, you might find yourself holding onto a business that is part of a dying model. Keep up with where your industry is headed, and, if it’s dying, don’t let your business die with it. You Experience a Life-Altering Event When business owners experience life-altering events, such as a divorce or a death in the family, it can seriously hurt your business. Research shows that environments with negative influences can drastically affect our ability to operate in a healthy, productive manner. If you experience a life-altering event, you need to take a step back and think about how much it will affect your business and whether or not you should hold onto it. You Clash With Your Business Partner or Party Starting a business with a friend, or worse, a relative, can be fun at first. But when trying to effectively run a business, conflict will always emerge. That conflict can mean the end of your business if not handled properly. Sometimes business owners will have a buy-sell agreement in place, but, unfortunately, that’s not always the case. Take that precaution, know when the conflict is too big to fix, and leave with your assets before everything crumbles around you. Bonus: Your Ego Gets in the Way I once worked with a convenience store owner whose store only turned a profit one year out of the 12 years he had owned it. He wasn’t unintelligent or uneducated — he had just held onto it because he didn’t want to admit defeat. We can’t let our ego influence our decisions. The goal of a business is to turn a profit. You might really care about your work, but, if there’s no profit, you can’t help anyone. Don’t let your feelings get the best of you. As they say, when you find yourself in a hole, quit digging. Know when it’s time to sell.
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