04/ 17/ 2003
by Vicki Gerson
Many business owners often think about selling their businesses. If you've considered it, it's important to determine whether or not it is the appropriate time to do so. Here are ten questions that you should ask yourself before taking any action.
If you have only owned your business for a short time, it may not reap the financial reward you were anticipating if you sell it now. An established business has many advantages over a business that is only a few years old.
If you are planning to retire in the near future, now is the time to do your homework. If you don't want to attempt to sell the business yourself by placing ads in the local newspapers or trade magazines, find a competent business broker to help you. Get it in writing that the broker will advertise your business.
If your business is not performing as well as your competitors', it may be difficult to sell. Potential buyers may believe your business isn't healthy right now. The ideal time to sell your business is during a strong economic cycle because your business should be keeping pace with others or outperforming others in your industry. In addition, if your business is outperforming other competitors during a recession, it may also be the time to sell.
Before you sell your business to strangers, is there any family member who would be interested in buying your business? It is possible this family member would then keep you on as a part-time consultant.
If you own a small pharmacy, for example, will the big guys be moving in around you in a year or two? Do you feel you will lose your customer base? If so, you might consider selling before these changes occur.
Is your standard of living higher than your business? If your business can't support you, then it is time to sell.
Are you no longer as interested in this business as you were when you first opened the doors? Does another business venture sound more appealing or exciting to you? If the answers to the two previous questions are "yes," then it may be time to sell.
If the future looks bleak, it may be time to sell. Some businesses become obsolete because the public isn't buying your product or service as it did in the past. Something new has taken its place. If that is the case, sell now.
Businesses that are in an upswing can be attractive to potential buyers. Meanwhile, potential buyers may shy away from business that are in a down swing.
If your business no longer interests you, it may be time to sell. It isn't pleasant to go to work every day when you don't want to be there.
Honestly answering each of these ten questions about yourself and your business may help you determine whether it is the right time for you to sell your business.
