Business exit planning can be contrived and premature in many circumstances.
If you follow my blog, you know I often share experiences from my years of brokering business exit planning, usually giving all the good reasons to sell your business – that is, if you’re approaching retirement age or just ready to explore something new in your professional life. But today I want to spin the tables a bit, and give you some reasons NOT to sell your business – at least, not right now.
So, why should you back off from the idea of putting your business on the market? Well, ask yourself whether you fall into any of these categories:
1. You’ve been “burned out” for several years now. Maybe you think this is the best reason to get out from under your business as fast as you can. But if you as the owner have been “running on fumes” for a while, I can just about guarantee you that the value of your business has dropped. Our business exit planning survey through the Exit Planning Institute is a great way to determine if you’re truly ready. It may be true that you aren’t the best person to keep managing things day to day, but my advice is to let a trusted employee take over some of your duties, or find an investor to partner with who can inject some life into the business, and focus your energies on increasing the value of your business until you can reasonably expect a profitable sale.
2. Your business has been through major changes recently. If you just embarked on an expensive R & D project or recently introduced a new product, now is not the time to sell your business. You won’t be able to show the buyer enough stability to get the best returns for yourself. You need to let the business settle in – and work with an Exit Planning professional to make sure you can document the evidence to show that your business is now positioned to grow and thrive in the future.