John B. Charleston, III, MBA
How do I know if I am ready to sell my business? This is probably the one question that keeps many business owners up at night the most. They can answer almost any other question about their business. Who is their largest client? What is their most profitable product line?, what their breakeven is, how much they spend on advertising and marketing, and how many employees they have. But this question is an enigma. The problem with this question is that there is no correct answer for every business owner. It depends on where they are at in life and professionally.
When it comes to answering the question, “When am I ready to sell?”, life usually dictates the answer. Some want to retire, some owner’s want to pursue a new business, sometimes it is the death of a spouse or business partner, or a divorce. Some business owner’s realize that they have grown the business as far as they can and either need to hire someone from the outside to come in and grow it or sell it to someone who has the capital and experience to grow the business. Some owners are just burned out, they just do not have the passion to continue running their business.
From my personal experience, it was the last scenario. After spending 14 years building a franchise operation from a new territory to one that was consistently producing profit every year is a labor of love. The time and energy you put into a business can be dizzying. If you consider the fact that only 1 in 10 businesses typically succeed, it’s quite the accomplishment to build a business that can be sold. It is not easy just to flip a switch and decide, I’m ready to sell. I really think it is an easier decision to say, “I want to own a business.” I know for me, deciding to sell my franchise did not happen overnight. It took me about 3 years to finally come to the realization that it was time to move on.
When my passion became my job, when working 70-80 hours each week became too much, it was time to sell. I think for many owners, this realization it can be extremely difficult to overcome. I think even someone who is ready to retire, it can be scary.
Now that you have come to the decision to sell, what are your next steps? Do you talk to your spouse, your family, your accountant? Should you tell your employees? You can become paralyzed because you do not know what your next step should be. I know I was paralyzed by the realization that I should probably sell. I thought about the decision I just came to (in reality, it was more like agonizing over it). I went for a walk, talked thru the different reasons in my head. But I still could not push myself to finalize my decision. I went fishing. What better way to clear your mind than to be sitting out on a lake with a few beers and pulling fish into your boat? Still no decision. Then it hit me, I should go I talk to my parents. The same thing happened to my dad in the family business he was involved in. They helped me confirm my logic and what was driving my decision. After talking with them, I knew that selling was the right path for me.
Driving home, I quickly came to the realization that now I had to talk with my wife. She was out of town with my daughter for a basketball tournament. I had to wait for her to come home. Now I was terrified. She helped me build the business from year two on, she worked in the business, she had as much vested in the business as I did. How would she react? Would she support my decision? Was she going to look at me like I had a third eye when I said I wanted to sell? Luckily for me, she was totally behind me. She knew that I was nearing the end of my journey with that business. There were a few times where I cried on her shoulder over the years about struggles in the business, stresses, pains. Originally, we had talked about waiting until my daughter graduated high school in 2021 to sell. Our conversation went like this “Honey, you’ve been on the bridge and ready to jump a number of times, are you sure?” My response, “I jumped in and swam to shore.” Boom! I was ready to sell! She was behind my decision!
If you are considering selling your business, you need to ask yourself a few questions.
Why do you want to sell?
Will your spouse/family support your decision?
What are you going to do after selling the business
Could something change in your business that would change your mind and decide to stay?
Know that you are one of many people to go through this sometimes-agonizing decision process. It is not always easy to come to the correct conclusion, but if you think it thru and weigh all your options, you’ll come to the correct decision. Be ready for a roller coaster ride of emotions and thoughts. Trust me these are just the first part of the ride!