There are several character traits that make entrepreneurs stand out from the crowd. Most entrepreneurs will continually aspire to drive their business forward, and will possess a unique set of characteristics and traits, something which I cover in more detail in my book (Drive Like a Real Entrepreneur). But what are the signs that they should sell their business? Typically, the answer can take two forms; personal or business and could be any of the following;
1. Have your life goals changed? 2. Is retirement age looming? 3. Are there health related reasons? 4. Can the family now and are ready to take over? 5. Do you still relish the challenges? 6. Has your heir apparent shown they are ready? 7. Is your income stream and wealth post sale likely to be adequate? 8. Do you wish to do something else?
You need to ask yourself these above questions regularly. Do not feel that you are under pressure to sell or handover. You will know when the time is right.
Then again business factors may determine the sale; 1. Is the competition too fierce? 2. Is a competitor a likely buyer? 3. Has your business tired or run its course 4. Is there too much regulation, bureaucracy or compliance? 5. Are the profits falling and your size making you uneconomic? 6. Are you too diversified or not diversified enough?
If so, you will be feeling that the business is not so much fun and almost certainly be losing your drive, energy and passion.
In summary, any one of the above 14 reasons can be evident to make you sell but please make sure that you as an individual are ready. This is the key to making any deal successful. Leave something in the deal for the buyer. The buyer has to see an upside.
However, the price that you can achieve is a large determining factor in all of this. If the price is right then the timing may have to take second place. Always take as much cash and as early as you can. Do not take (unless they are blue chip) an exchange of shares. Always take professional advice. Please see the bonus chapter in my limited edition of my book, ‘Drive like a Real Entrepreneur’ for real life experiences from entrepreneurs who have sold their businesses.