Putting up your own business, and owning and running it is a lot like playing poker. For one, starting it is a gamble. As you work to stay in business and grow, you need to know when to take risks and when to fold. So when should you call it quits and sell your business? Here are the signs.
1. The Risks Outweigh Opportunities
If you’ve been operating for at least a couple of years and your business has been successful so far, pat yourself on the back. Bloomberg says that 80% of all small businesses don’t even make it past the 18-month mark. That could mean you’re doing something right, or you’ve been unusually lucky. If it’s the former, good; but if it’s the latter, don’t count on your luck to last forever. Owning and running a business comes with a ton of risks, and if there aren’t enough opportunities to make money, those risks can catch up with you.
2. Your Business is Now Worth More
Knowing that your business is too big a risk to keep open is one reason to sell, but what if it increases in value? Shouldn’t that be a good reason to sell? Many entrepreneurs think that a business should be sold when it’s failing, but a better strategy is to sell when it’s succeeding. Take the case of George Clooney. He and his partners sold Casamigos, their very own brand of Tequila, to global liquor conglomerate Diageo for $1 billion. With that kind of money, they could always put up a different business or do whatever they wish. That’s one deal a company like The DVS Group would have loved to set up.
3.You’re Burned Out
What keeps people in any business is their passion for it. Despite the risks and challenges, many entrepreneurs insist on hanging on. Some businessmen work beyond logical limits, keeping the business open even in the face of mounting debts. If your business is on the losing side and you no longer have the motivation to keep it open, it’s time to throw in the towel and sell.
4. You Want More Time for Yourself and Family
Running your business can eat up all your time, especially when it’s yet to become profitable. It’s not unusual to not take time off for holidays, but sometimes you also have to work on weekends. Sleep can even become a luxury. Not being able to rest when needed can take its toll on your health and your relationships. Think about your priorities and adjust accordingly—even if that means selling your business.
5. You Want to Retire
Retirement is, of course, another reason (and a good one) to sell your business. Be sure to crunch the numbers and sell at a good price, as you’re selling your primary source of income. After getting a good price for your business, you can decide on putting up another (hopefully) more profitable business, or put the money away for a sizable nest egg.
There is no shame in selling your business for whatever reason. You should remember that many successful entrepreneurs like this one failed many times before achieving phenomenal success. Selling your business is simply a step in another direction, and not always a painful admittance of failure.