There comes a time when a business owner has to decide to sell his or her company. This is often the product of a master approach, at other times it is due to business model constraints. Such an exit sometimes takes the form of selling the company, changing shares, or, in less lucky situations, completely dissolving the business. It may be difficult to decide the exact right time to make the difficult call. In this article, we hope to shed some light on some of the signs that it's time to consider an exit plan, whether that means selling or handing over the reins to someone else.
Many entrepreneurs reach a point where they no longer feel committed to running their companies efficiently. From past experiences in consultation with company owners, this lack of enjoyment is often caused by grappling with staffing matters such as HR, recruiting, firing, discipline, and so on. When the business expands, the startup issues (such as funding and payroll) continue to disappear.
These problems can seem to be huge, but they are more enjoyable for most entrepreneurs. They are being replaced by smaller challenges that are much less enjoyable and frustrating, such as coping with staffing and administration. For several entrepreneurs, this is a significant shift in mindset and temperament. If these newer issues are putting so much strain on you individually, it might be time to consider an exit strategy, if not for the company as a whole, then for yourself.
This is similar to the first point. As a founder, you may sometimes notice that as the company grows, you become less of an asset to the company. This is a difficult reality to embrace, but the best entrepreneurs should be frank with themselves about it. Many great entrepreneurs, for example, are excellent salespeople. When a company's annual turnover exceeds $5 million to $10 million (depending on the business model), it continues to demand leadership in several fields. As the business owner, you must have the foresight to see this moment of the company's lifecycle and the humility to act on it.
If you see a megatrend on the horizon that threatens to make your company obsolete or marginal, it's time to consider an exit strategy. This can be simple, but it may be a bitter pill to take, almost like admitting that the business has outgrown your skillset. No enterprise is secure under the new technical direction that our world is in.
Retail/B2C sectors may be facing this to the largest extent at this time, but it also occurs in B2B markets. You must keep an eye out for these developments. And if you're fortunate enough to see the tidal wave approaching, you can just sufficient time to respond.
Exit strategies can, of course, be motivated by positive factors as well. When a lucrative offer comes your way, you can decide to plan an exit strategy. You may want to sell if the market is frothy and the excitement around your business provides a lucrative opportunity. For e.g. If you're a young, ambitious social-media website trying to make a profit and Facebook comes knocking, I'd advise you to take the offer seriously. As with the rest of these points, a healthy dose of reality and modesty is needed. Your corporation may not be worth a billion dollars. A multi-million dollar bid is always worthwhile to explore, particularly in a seller's market.
If you are thinking about selling your business, evaluate the above aspects and we at Simplified Market Place assist business owners to achieve a greater understanding of their business and the related problems. Get help from our experts by clicking on the link below.