Just about every hard working American knows someone who owns, or who has once owned, their own business. Most of us know small business owners more intimately, as they work on the streets where we shop, they live in our neighborhoods. Their houses aren’t at the top of Mulholland Drive or Park Avenue. They are one of us, and we all admire them, because they are taking a risk we never felt we could. They stay up late, the get up early. They sell, they create, and they make money – sometimes. And at some point, business owners sell. When, however, do they make the decision that it is a good time to sell? There are several reasons successful business owners start negotiating a price.
Kim Bernhard was enjoying her lucrative and unique pet sitting business in Northeastern Pennsylvania when she met her future husband through church. Most friends and family did not believe a business playing with lonely pets all day could possibly provide a decent income. However, so talented was Kim at identifying and addressing a need within her community that, a marriage and three kids later, she felt that she no longer had the time to even sit back and enjoy the fruits of all her efforts. She was so busy fulfilling client needs that she never had time to fulfill her own or her family’s. She sold her business – the custom-designed conversion van with a mobile play unit and pet grooming station and the lengthy client list included. In doing so, she tripled her profits and left the Northeast completely debt free.
Diane Schmidt, from South Jersey on the other hand, could not keep her head above water managing her mother’s antique and craft store, and when she finally walked into a Macy’s department store, one evening eyeing up the expensive jewelry she could not afford to sell, she heard herself babbling and sobbing uncontrollably. A nervous breakdown encouraged her to sell her business and accept the losses. But for Dave Ketterer it was different. When he decided he had had enough of the grind that comes with working for a large corporation, he left his 20+ year position as a highly skilled exterminator for a major pest control company, and began his own business. Since opening in 2004, he now has so many clients; he has had to begin hiring people to assist him on his routes. He can’t wait to sell his business to his oldest son.
The decision to sell a business is different for everyone, but there seems to be a few general rules that inspire people to make the decision that the risk of enduring is greater than the risk of selling.
The most glaring reason for selling hardly needs repeating. When the sale of your business would bring you more profit than keeping the doors open, it is certainly time to sell.
When all your risk and assets are wrapped up in your own business, perhaps, you should sell and diversify the risk a bit.
When keeping your business keeps you from another better opportunity, you might need to sell.
When keeping your business keeps you from investing in your family, maybe even tying up your time so tightly that you are in danger of neglecting them, you might need to weigh the risk of holding down a 9-5 job as opposed to the 24/7 job of running your own business. You might need to sell.
Maybe you want to invest more time in your faith life or in some sort of volunteer activity and owning your own business does not allow you to do this.
When you are “spent” and you have no time for yourself, when you rarely take a day off, and you can’t remember the last time you got a full night’s sleep, these are also great reasons to sell your business, even if the risk of selling is not a low one. Risking your health can be a horrible decision in the long run.
But the number one reason most business and financial experts insist is the absolute best reason for selling your business is
when you are going to make a greater profit from selling than you are from keeping it afloat and working it day in and day out.
And above all, go with your gut. It often speaks the truth, even in logical decisions dictated by numbers and opportunity. If you love what you are doing and you are doing it well, why sell? If you once loved what you were doing and you have reached your capacity to do any more, it’s a good indication that it is a time to sell.
Tennessee Valley Group
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