Signs It’s Time to Sell Your Small Business

Business owners and entrepreneurs have an undeniable sticktoitiveness that can help them hang on through adversity and come out better than ever on the other side. Unfortunately, that tenacity can also lead to dragging your feet despite clear signs that it’s time to sell your small business. 

While the decision can be heartwrenching, recognizing that it’s time to exit can set you up for a brighter future. On the other hand, dragging it out to the point of desperation robs you of the chance to pave your path as you move on to your next phase in life. 

Changes in the Industry You Can’t Keep Up With

The world moves remarkably fast, and there are some scenarios where it’s impossible to stay competitive due to your geographic location, availability of vendors, or lack of training. 

When you start treading water instead of making confident strides, that pressure will only continue to mount. Resist the urge to continue trying to keep up in the face of clear signs you can’t. It only leads to greater financial risk and puts you in an unfavorable position as a seller. 

You’ve Lost Your Motivation

Perhaps one of the most devastating signs that it’s time to sell your small business is that there may come a day when going to work causes more dread and anxiety than it does joy and pride. 

You’ve likely reached your burnout point when you find yourself with a bad case of the “Sunday Scaries” every single week. It’s certainly nothing to be ashamed of. Being a business owner is an all-encompassing role that can drain your motivation to continue. 

That doesn’t necessarily mean you should throw in the towel at the first sign of disengagement, but you should take measures to refresh and reinvigorate before it leads to total exhaustion. Afterward, if you’re still feeling disconnected, that’s a good time that it’s time to sell. 

Life is Taking You in a Different Direction

Even if you currently feel like there’s nothing that could take you away from your business, life tends to throw curveballs when we least expect it. 

Perhaps your spouse got their dream job across the country, or you’re taking on a caregiving role for an ailing parent. Even pursuing your personal satisfaction in the form of retirement is a legitimate enough reason to sell your small business. 

Whatever the reason, remember that your family and health should take priority. Otherwise, you risk losing out on some of life’s most precious and pivotal moments while you’re distracted by the stress of being a business owner. 

You Don’t Have the Capital to Continue

There’s a phenomenon called the sunken-cost fallacy that involves a situation where someone refuses to give up on something because they feel like they’ve invested too much into the project, strategy, or business venture to stop now, even if walking away would be more beneficial. 

This flawed way of thinking crops up often and in many small, relatively meaningless ways. We find ourselves reading a boring book because we’re already halfway done or continue eating at a buffet long after we’re full because we’ve already paid for it. These situations are inconsequential in the long run, but when fallacious thinking rears its ugly head in our business situations, it can have terrible, long-term effects. 

If you continue to rake up debt just to keep your business afloat, despite a clear history of declining revenues, you’re falling victim to the sunken-cost mindset. Honor the signs that it’s time to sell, and you’ll be better off financially and emotionally in the long run. 

There’s an Irresistible Opportunity to Sell

For most business owners, the best-case scenario is an opportunity to sell their business for more than the total of their debts and investments. It presents more options than most other selling scenarios, like a profit margin large enough to start a brand new venture or enough cash to head comfortably into retirement. 

Growing your business’s value today is the ticket to achieving this outcome. Waiting until you’re ready to exit doesn’t leave enough time, resources, or personal passion for creatively strategizing how your company can look more attractive to buyers. 

A business coach can help you map out an exit strategy that is both rewarding and validates all the effort you’ve poured into being an entrepreneur. The earlier you start, the more likely you will experience a smooth transition that nets you the most return for your efforts.