It can be an excruciatingly tough decision. You’ve created a successful business and are generally happy with where it’s headed. You spend every waking hour working on growth and you are reaping the benefits of all that labor. Selling your business and an exit strategy are probably something you’ve considered down the line – but times are good so you’re definitely not going to sell now. Right?
Here’s the thing. Your business is currently successful. The economy is booming. You have solid numbers for the last few years. Your business is probably worth a lot right now. How much are you willing to bet that this upswing is going to last? If you wait too long to sell, then the answer could be everything.
No one knows how long the economy will boom, but we all know it can’t be forever. If we have another crash like the one in 2008, could your business survive? You and your family might currently be in good health, but that could change and pull your focus away from the business to the point where the business falters.
The calculation of how long to hang on to a business while the going is good can be tough, but here’s a few things in the tea leaves that might make you consider selling sooner rather than later.
The Baby Boomers are retiring in record numbers. A lot of these Boomers are small business owners and as such will be looking to sell in the near future so they can retire. That means a glut of stable, long-term small businesses with good numbers will be hitting the market. All of these great businesses will be your competition, and too many businesses for sale will absolutely push prices down.
The economy is great, and there’s a rush of new construction happening everywhere – in both the residential and commercial sectors. Real estate prices are soaring. Sounds like life in 2006 and 2007, right?
So what’s a business owner to do? You may not want to sell because you are essentially selling yourself out of a job – but here’s another way to look at your business investment. You can only grow your current business so far, and if this article is resonating with you then you’re probably nearing or have already reached the peak. Selling and moving on to new ventures can grow you as an entrepreneur instead of just growing one business. Here’s another thought – if the economy does crash and you were able to sell before it happened, you will be uniquely positioned to invest in a new business venture when no one else has any capital and the prices for businesses are way down.
The tried and true notion of buy low, sell high absolutely rings true in the small business market. If you haven’t considered selling because everything seems great – maybe you should. Selling your business while it’s still worth a lot will give you choices and capital that you won’t have if you hang on through the wave of retiring Boomers and the next economic meltdown. Consider growing yourself as an entrepreneur and get on the path to sell today.
Are you a small business owner who hasn’t considered selling? Would you like to know what businesses like yours are currently getting in the market? Please ask us! Leave any questions or comments and we would be happy to help.
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