Is this the right time to sell your business? Should you wait and sell at another time? How can you tell? Frankly. there are no hard and fast rules regarding when or how to unload a business, but there are a number of key indicators you should be aware of.
Sell when business is good
You worked hard to build your successful business enterprise, and your reputation is excellent. Customer satisfaction is at an all time high, and profits are booming. You might be surprised to know that the Small Business Administration and many other financial experts will tell you that this is the perfect time to sell your company.
The more popular your company business, the higher price you are likely to receive from a buyer or investor. If you built your biz with the idea of someday selling it and using the proceeds to fund a nice retirement for yourself, sell at the peak of popularity.
The vast majority of prospective buyers are interested in profit potential. If your company is making a lot of money, a prospective buyer may assume that they, too, will realize plenty of profit.
Amass at least three years worth of brilliant profit statements to attract the best possible business buyers.
Sell when you have a better business idea
Imagine for a moment that you built your business selling roller skates. You’ve been earning a nice living selling roller skates, but your research indicates that surfboards are poised to become the new big thing. You want to get into the surfboard business, but lack the capital to start.
Sell your roller skate business to the highest bidder and use the proceeds to begin your new board biz. Of course, real life is a bit more complicated than this, but you get the general idea.
If you built one successful business, there’s an excellent chance that you can do it again. Research potential markets and scout around for your next customer base.
Sell your business before you lose your competitive edge
When you opened your doors for business, you were the only company that made and sold roller skates. Because you were the #1 go-to company for skates, every customer came to you. Now, there are five companies on your block that make and sell similar skates, and you’re not getting as much walk-in, roll-out traffic as you used to. Another skate seller may be interested in buying your unsold inventory or purchasing your business brand outright.
Globalization, changing technology and shifting trends may cause your now-busy business to falter. If you have the impetus and drive to stay ahead of the curve, good for you. If you’d just as soon get out while the getting is good, do it. With your entrepreneurial spirit, you may be able to start a brilliant new business enterprise in a brand new market sector.
Sell your business when it’s no longer fun
If you started your business enterprise with a passion, and now it’s more of a grind than a good time, it may be time to think about selling your business for a handsome profit. Investopedia cites boredom as a valid reason to sell. If you have a feeling that it’s time to get out of the game, speak with a business attorney and begin to make plans to sell your business. Don’t rush toward the first offer you receive, though. Sell smartly, move on, and live without regrets.
Don’t wait until business is desperate
If your sales numbers are tanking, it’s probably not the right time to try to sell your business. There’s really no good reason to take a big financial hit if you don’t have to. It may, however, be an excellent time to have a friendly and honest chat with an attorney who is well versed in liquidation and bankruptcy law. If your company is haemorrhaging money, and you want to get away from the pressure, please consult with a bankruptcy lawyer in Singapore from IRB Law.
Maybe you just want to liquidate
If you want to sell your company, but the right sort of offers are not coming in, it may be time to cut your losses and liquidate. We can help you do that. We’ll help you distribute your assets fairly and pay off your company debts. Liquidation is not necessarily failure. Done properly, a business liquidation can be a fresh start. To know more, consult a bankruptcy expert at your earliest convenience.
Baiross is one of the founding partners of I.R.B. Law. He prides his practice on providing no-frills legal advice to his clients at competitive rates. He specializes in helping clients handle their personal legal issues such as debt recovery, divorce, and criminal defence. Being an all-rounded lawyer and a peoples person, Baiross is well equipped to give legal advice to clients in a manner that is easily understood by all. He makes it a point that his clients understand the situation they are in. He is also careful that his services remain affordable to the common man.