You have to analyze your reasons for selling
before making such a high-impact decision. Generally, reasons
for selling fall into five general areas, which should be examined
carefully:
Estate Planning
- A retirement plan should be included in your long-range planning.
Like most business owners you probably have a large part of
your assets tied up in the business and in order to retire you
may have to sell. A retirement decision is best made when you
plan for it - not when you're under pressure.
Burnout - Building
and managing a business takes a great deal of time and energy.
It's more than a job - it's often all-consuming. Be alert to
warning signs that you may be losing interest in your business
- before you lose sales and market share. You'll receive the
most compensation for your business before your drive and will
to succeed start to diminish.
Major Investment Requirements
- Look the future. Advancing technology may dictate that as
your business continues to grow, you'll probably face additional
investment requirements in order to remain competitive. You
must analyze the market and your competitors. If you're not
prepared to make such a outlay, it would be best to anticipate
these changes and sell the business before a further investment
is required.
Changing Management Needs
- As a business is growing, it requires additional time… and
at various levels, different management structures. In the early
stages, a business demands the exacting, hands-on presence of
an ever-present owner.
When a business reaches a sales volume of approximately
$ 5 million, delegation of responsibilities is required, required
in order to grow, or even just to maintain sales volume. You,
the owner, can't be involved in every detail.
When a business reaches about $25 million in
sales, management should be setting long-term strategies, with
less concern about the day-to-day operations. At this point,
you have to take a long, hard, critical look at your management
style. Are you willing, or do you know how to delegate responsibility
to others? Will you give them the authority to make the necessary
decisions? Can you hire the type of managers required to do
the job?
Product Life - There
is a life cycle to everything … including your product or service.
Be realistic in evaluating whether your product or service will
lose its appeal or usefulness. Is it a one product business
or does the product line lend itself to developing new products?
Do you have the innovative ability and creativity to take it
to the next step? Make a decision … don't let it be decided
for you. Proper timing is critical to achieving maximum value
for your business.
