If you ask any entrepreneur what will be the toughest decision to take at any point in his/her career. You guessed it right. Did we say selling one’s business? The emotional barrage which follows such decision may even overpower rational considerations or behavior. Don’t be surprised if we tell you that not all business owners would want to sell their business. But even if that’s not on the cards, it is important to contemplate taking the ‘exit’ route rather than the ‘escape’ route if things are spiraling out of control. Here are a few signs that indicate your business is ‘sale ready’.
# Mental preparation:
Entrepreneurship, more often than not, is a state of mind. Whether you stay put or take the exit route depends on your mental state, while the reasons may vary on a case by case basis such as not getting the intended tangible gains, over-reliance on single ownership, unforeseen emergencies, health crisis, lack of clear succession planning, lack of future business planning or clear vision, short-term goals, lack of investment or funding to scale up operations, etc. Sometimes, tech start-ups can be created specifically to increase valuation and exit opportunities. Now the question is are you emotionally prepared to move on or is mental pressure triggering an exit? This requires careful consideration of facts and measurable data to either revisit your plans or look at doing something else; follow only the ‘X’ or ‘Y’ approach.
Are you plateauing out?
There will be times when the company’s growth has stalled or the business owner is running out of ideas, or the industry’s problems have plateaued out. This could be a sign that a company is sale-ready. The business owner over time may lose his drive to scale the company up to the next level. Investment or hiring decisions need to accelerate business growth may take a back turn no sooner than the business owner or management decides to move on.
Is your company ready?
How well is your company positioned to attract prospective buyers willing to pay the price you’re looking for? This means it should have a healthy balance sheet, a long and uninterrupted history of profitability, best practices, lean processes, and a good customer base for sustainable growth.
Further, can the business run without your holding the reins? Do you have a competent management team and a well-documented replicable business model and execution process for consistent business operation? What are the external factors to be considered that can impact your readiness to sell your business? These may be market conditions and impending changes such as regulations, industry compliance, foreign trade agreements, and disruptive technologies.
Do you think your business is sale-ready? Or maybe it’s not. Simply talk to us as we’ll help you decode the entire process of selling your business today.