You’re selling your most prized possession – your business. Whether it’s on a high note or not, it can be a daunting prospect, especially if you’re worried that it reflects badly on your abilities.
But it doesn’t have to be that way. There are plenty of reasons to sell, and none of them have anything to do with business accomplishments, abilities, or lack thereof.
There’s no shortage of businesses for sale, many in their prime. If yours is one of them, take solace in the fact that all the other owners have acknowledged the countless positives to selling a business.
To avoid seller’s remorse, here are some of the positive aspects of selling your business successfully:
Diversifying Your Portfolio and Branching Out
A sale generates liquidity for you.
If the equity in this business is your most valuable asset, selling it will free up capital that you can then put into more liquid, lucrative, and diverse investments.
Whether you join a high-yield mutual fund, an index fund, or a fixed-income fund, or simply buy into family businesses, local projects or philanthropies, there’s scope for rewarding investments.
Using Your Expertise to Further Your Career
Sharing your insights after the transfer could be a good way to make sure you don’t lose your edge.
Unless you sign a non-compete agreement, which could restrict you from consulting with similar businesses or even starting another one, there’s no reason to throw in the towel. Then there’s also the option of staying on as a consultant at the company during the transitional phase, which would benefit the business, the clients, and its suppliers.
Flipping Business and Becoming a Serial Entrepreneur
Future business endeavors stand only to gain from the experience you’ve amassed.
If you’re ready to pass on the baton, and you’re confident you can reshape an acquisition into an attractive enterprise, then selling is the way to go.
Recent statistics show that most business sellers are serial entrepreneurs or multiple business owners, so the odds are in your favor, whether you want to acquire a new business quickly or you’re looking at a long-term ownership scenario.
Safeguarding the Future of Your Workforce
Whether it’s enforcing non-negotiable clauses that forbid dismissals and relocations or it’s maintaining some level of involvement and authority within the company (staying on as consultant, for instance), there are ways to ensure a certain level of job security for your employees.
One alternative is to step down and sell all, or part, of your shares to employees at the industry standard multiple of EBITDA.
The transfer would likely be lengthy and less profitable as employees need time to pool their resources – but you’d be securing their future within the company. After all, virtue is its own reward.
Retiring and Making the Most of the Years Ahead
It could be a one-year sabbatical or a comfortable retirement; whatever it is, you’re certainly entitled to it, and business should come second.
So as long as you have a good exit strategy, selling up, kicking back, and enjoying the fruits of your success is the way forward.
Taking Advantage of High Demand
External market considerations may dictate the timing of your auction, as Inc.com puts it.
Large mergers, selective tax breaks, and fierce competition can limit your chances of growth in the future.
It’s important to anticipate those ebbs and flows, to know when your business is at the height of its success, and to seize the moment.
Nothing tells you it’s time to quit while you’re ahead like a meteoric rise in popularity.
Timing it Right Moneywise
You may have put off selling your business all this time because of the ensuing lump-sum tax.
But tax decreases are unlikely, so sooner or later you’ll have to take the plunge.
You may also have noticed that online businesses are faced with increasingly stringent sales tax laws, so if your plans for the future involved selling more of your products and services online, you wouldn’t be wrong to take a step back and reassess your options.
If you have no pending litigations, insurance obligations, government regulations, environmental issues, health risks, or HR issues, then it’s best to strike while the iron is hot.
The main takeaway here is that you can put your worries into perspective and focus your energy on making this transfer a success for all those involved.
Your tenure, however gratifying, will give way to even greater achievements.
Author: Bruce Hakutizwi, USA and International Accounts Manager for BusinessesForSale.com, the world’s largest online marketplace for buying and selling small and medium size businesses. Bruce has over 7 years’ experience working within the US business transfer marketplace connecting buyers and sellers.