By: Joyce Wilson

In the early days of your business, you poured your blood, sweat and tears into making it successful. If someone had told you then that one day you’d want to sell it, you would have told them they were crazy. Today, however, you wouldn’t be so quick to pass judgment. In fact, you may even agree with them. If you suspect it’s time to move on, seriously consider these top signs. Then, use these tips from Riddick & Co Entrepreneurial Finance to make a plan for selling your business that allows you to net the most profit.

Top Signs It May Be Time to Sell Your Business

The most obvious sign it’s time to sell your business is that you’re thinking about it, period. However, as with any major life decision, simply thinking about it is not enough reason to act. What is reason enough, then? Here are a few:

  • You’re burnt out, or quickly approaching that point.
  • You can no longer generate ideas that keep your business moving forward or, worse, ideas that keep your business competitive.
  • You have experienced one or several major life changes that make it difficult for you to stay focused on the bigger picture.
  • Your passions, aspirations, values and visions have changed.
  • You need to inject more money into your business than you stand to make in the foreseeable future.
  • You’re always at work, and you’re resentful because of it.
  • You receive a purchase offer that you would be foolish to refuse.

If you can relate to any of the above, it may be time to sell.

Preparing Your Business for Sale

Once you make the decision to list your business, you then need to prep it for the impending sale. Or, rather, you need to position your business so that it is desirable to another entrepreneur, as, according to Score, “businesses are bought, not sold.”

One of the first steps in making your business desirable is getting its finances in order. Assess your debt and pay it down, but do not do so at the expense of profit. Find a balance, and avoid other common debt-related mistakes. Gather and organize all your financials, ranging from bank account statements to service contracts to customer lists. Also, if you haven’t already done so, make sure you’re sending out clear, concise invoices. Fortunately, you can use this invoice maker free of charge to help you design these important documents for your business. These will be incredibly important when it’s time to gather paperwork and begin assessing everything.

Next, determine the types of businesses that may have an interest in acquiring yours. Is there a local competitor that wants your customer list? Is there a company that could have a use for your particular product or service and/or employee knowledge and training? Identify specific companies, and then leak word about your desire to sell.

Next, do some housekeeping. If you’ve been letting undesirable employee behavior slide, put an end to it. If you use company funds liberally, do so no more. Tighten your company governance processes, update your business model and work on improving customer satisfaction. If you’ve made important changes to your company info, such as bought new shares, invited new members, changed the name or moved, make sure to report it in your annual report. Failure to do so could lead to state fines and penalties, which could make your business appear less desirable. Finally, value your business. This way, when a company inevitably comes to you with an offer, you’re ready to counter.

When it comes time to sell your business, it’s important that you have an exit strategy in place. Doing so can help you make the most of your investment in your final days of business ownership.

At Riddick & Co Entrepreneurial Finance, our financial advice is tailored to your specific situation and unique life goals. We believe the keys to creating a financial dynasty for generational wealth are: proactive and effective tax planning, wise investment decision making, and building multiple income streams. Reach out today to get started!

Links and references to outside sites are for reference only and are not an endorsement or recommendation of any kind to anything contained in the referenced website.

Author – Joyce Wilson is a guest blog writer for Riddick & Co Entrepreneurial Finance and is not affiliated with the firm in any other capacity.

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