Selling your company can be a difficult decision to make, but it’s one many business owners will have to make at some point in their careers. Some sell because the timing is right, the payout is high, and they feel ready to move on to other projects. Less fortunate owners sell in times of struggle when they feel they’ve depleted other options. Many owners end up either wondering if they should have waited longer to sell while others regret selling so late in the game. The question then is, how do you know if and when it’s right to sell?
I’ve put together a list of a few fundamental questions you can ask yourself to help guide you towards making the best decision for you. Keep in mind that the most important thing you can do when asking yourself these questions is to remain as true and honest with yourself as possible. Friends, family members, investors, employees, and many other people depend on your business. As tough as it may be to face the reality of some of these answers, don’t deceive yourself. Being realistic will protect and benefit you and your company in the long-run.
First of all, do you have a buyer?
There is no point in stressing over your company’s sale if you don’t know if there are any interested buyers out in the market. The first thing you need to do is find out who would be interested in buying your company.
Larger companies (i.e. your potential buyers) usually have a dedicated business development team that is constantly looking for deals. Consider setting up a meeting with whatever company you think may be interested in buying and let them know that you’re considering selling. The great thing about these meetings is that you can sign a nondisclosure agreement and begin negotiating before your competitor or anyone else finds out about the sale. Once you finalize negotiations, if the deal makes sense to you and your company, of course, then you can truly consider the next step – letting go.
Would selling solve your problems?
Selling can solve many problems, but don’t assume that’s always the case. The outcome of your sale will depend on the type of company you run, the current competitive landscape in your market space, the internal issues that are driving problems in the first place, and the long-term goals of the company. Take the time to analyze and evaluate to what extent a sale will solve whatever issues you are experiencing and base your final answer on that analysis.
Has your passion turned into exhaustion?
This is a very personal question, and you definitely don’t need to air it out publicly, but you do need to answer it to yourself.
Companies require business owners to have an incredible amount of passion in order continuously drive a company towards it’s greater vision. Major obstacles inevitably come your way, and that pressure can wane on a person. After years of endless sacrifices, long hours, and delayed gratification, it’s understandable if you begin to second guess your devotion. But passion is what fuels you and in turn fuels your employees to keep pushing forward no matter what. When that passion reaches it’s peak, and you start to feel exhausted, this can become very dangerous for your business. You no longer possess the desire and the stamina to carry the weight of the company on your shoulders. And perhaps that’s when you know it’s time to pass the baton.
Again, these are just some of the fundamental questions you need to ask yourself before jumping into the huge task of selling your company. Of course, many other factors are going to come into play if you do in fact decide to sell, but before stressing out, be fair to yourself and take it one step at a time. Just remember: most startups fail, but most entrepreneurs succeed.
Holden Buckner is a Mergers & Acquisitions professional with over a decade of experience. To learn more, please visit Holden Buckner’s main website.