While starting and running a business can be immensely rewarding, there may come a
time when you decide to sell your operation and retire or move on to other endeavors.
The question is, how do you know when it’s time? And once you sell, what will you do
next? If an online money-making venture sounds interesting, Your Income Forum can
help you get started.
Earnings Are in Decline
If you see earnings are on the decline, and you don’t see a way to bring them back in
line, it may be smart to sell while there’s still value in your business. Discuss figures with
your accountant and make an honest assessment. Is your product or service dated?
Are manufacturing expenses or material prices rising exponentially? Is there any way to
revamp, rebrand, or launch a new or different product line that would be competitive in
the marketplace? Having the numbers in front of you will help you make an educated
decision.
You Can’t Compete
Has someone else created a better mousetrap? Is big business overtaking your town?
There are some instances where your competition is simply running the show, either by
way of improved or less expensive offerings or, for example, if a big box retailer comes
in and drastically undercuts Mom & Pop businesses. While you could certainly try to
pivot, there may come a time when it’s better to cut your losses, sell your business, and
move on to something else.
The Market Is Crowded
Sometimes the marketplace is just too crowded to compete. You might be able to move
to another location or take your sales online, or you could make a tidy profit selling to
one of your competitors and letting them expand their presence. In this type of scenario,
you could very well make out well by selling your business and your inventory at the
same time. If the market is really tight, you might even be able to get a bidding war
going.
You’re Ready for Something New
If your heart isn’t in your business anymore, or you’re itching for something new, that’s a
sign it might be time to sell. Running a business of your own requires dedicated effort, and according to Everyday Health, if you’re burned out or just aren’t feeling it any longer, pay attention to your feelings. Perhaps you’ll launch an entirely new business, take off and travel the world, or spend more time with family and friends. Only you can
decide what feels best and when it’s the right time to take action.
Preparing to Sell
A knowledgeable commercial real estate agent can value your property and help you
get it ready to go on the market. You’ll need to have all of your financials in order for an
accurate valuation. You may want to sell the business and inventory together, or
separately. According to CWS Capital, if you’re planning to reinvest your profits in a new
business, you may be able to conduct a 1031 exchange that will help reduce your tax
burden.
Final Paperwork
If you sell your business, you’ll need to formally dissolve relationships with vendors and
suppliers. You’ll also need to file a final business tax return, and if there are changes to
your company like address, name, new shares, or membership, you’ll need to detail this
in your annual report. Failure to file an annual report could lead to your state imposing
fees or penalties and you could potentially have the right to conduct future business in
the state revoked.
When you’re a business owner, selling your company isn’t just a transaction. It can feel
emotional as well. Give yourself time to come to terms with the sale and have a forward-
looking plan top of mind. It’s okay to grieve the sale, even when it’s a positive thing.
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