9 Signs It’s Time To Sell Your Business

It’s not easy to consider selling your business, especially if you built it from the ground up. Cashing in on your life’s work may be an emotional proposition. If nothing else, you don’t want to make a mistake. You want to finish strong. 

So, how do you know if it’s time to sell your business? Here are nine signs you might see that signal when to sell your business:

1. You Are No Longer Passionate About the Business

Are you still on fire about your business? Do you wake up every morning raring to dig in? Does every success, every KPI increase still make your day? 

If you derive great satisfaction from serving your customers and crushing your goals, then selling your company may not be worth it at any price. A great venture isn’t just about making money. It’s about solving problems, helping people, and adding value to the marketplace. For many business owners, that’s a powerful source of purpose.

After a while, the honeymoon period may be a distant memory. You may have settled into a routine going through the motions. The organization doesn’t take any less raw work to keep afloat and growing. However, you might not have nearly the same rush of accomplishment as you work on it. 

Owner burnout is not good for business. Most companies need passionate leaders to thrive. If the passion is gone for you, the best way to preserve your legacy, protect your employees, and honor the work you put into getting it up and running may be to pass the torch.

2. Market Conditions Are Favorable to Sell

Sometimes, the market tells us it’s time to sell before we get to that thought by ourselves. You may notice (or be tipped off) that now is an excellent time to sell your company. There could be significant demand in the marketplace for enterprises like yours. The market for any business might be particularly hot and competitive, with a lot of motivated buyers in the market.

The goal of any exit strategy is to “sell high.” If you smell a moment when the marketplace might be particularly eager for your business, it might be the perfect time to sell. 

3. The Price is Right

It’s almost never a bad idea to sit down with a business valuation expert on a regular basis and determine what your business is worth. Market conditions aside, businesses are usually valued based on their assets and a multiple of their annual revenue.

If you haven’t checked in on the value of your business in a while, you may be in for a pleasant surprise. Your business broker or valuation expert may come back with a value that makes a sale an attractive prospect. 

4. You’ve Reached Your Goals

At times, it’s the better part of valor to exit while you are ahead. Maybe going, going, and going on isn’t the most satisfying course of action.

Maybe your business has accomplished everything you set out to do. It could be you hit a financial goal, dominated your niche, achieved the highest levels of industry recognition, created a disruption, or pioneered a brand-new sector of the marketplace. Perhaps you just had a point to make, and you made it with a period —exclamation mark — end-of-sentence.

If this is the case, it’s worth considering a sale of the business so you can go out on top. For example, when your manufacturing company is the best in Austin, it could be time to sell your manufacturing business in Austin to hopefully get that top-dollar offer. To move the goalposts and keep going may be a recipe for diminishing returns. 

5. The Business Is Outgrowing You

It can be tough to accept, but you may not be the right person to lead your business into the next phase of development. Sometimes, an enterprise outgrows the skill set of even the person who founded it. At that point, the owner who willed the business into being through brute force of effort might inadvertently turn into the bottleneck that hinders the organization in its next stage of evolution.

6. Events In Your Personal Life

It doesn’t take a business reason to make “right now” the time to sell. Business owners are people, too. They are not immune to personal changes; occasionally, events in your personal life may dictate the time to sell. 

You could be approaching retirement. You might have to relocate for various reasons. You may have a health incident, a marriage or bereavement, the birth of a new family member, and/or motivation to spend more time with your family.

Deciding to sell for personal reasons is most decidedly not a failure. There’s more to life than work, and selling for personal reasons can be the most honorable exit of all. 

7. Offer You Can’t Refuse

A business doesn’t even have to be listed for sale to attract a buyer. It could be the thought “I want to sell my business in Austin,” is nowhere near your mind. You could be going about business as usual when someone appears out of the blue, making an offer so attractive it makes your head spin. It’s the proverbial “offer you can’t refuse.” 

This might be an entrepreneur scaling through M&A, someone looking to vertically integrate by adding an establishment like yours to their portfolio, or even a competitor who wants to clear the field. 

Of course, you don’t have to sell, but if the offer is attractive enough, it may be worth considering. However, always do your own due diligence on the buyer. Don’t enter into a purchase contract (and disrupt your operations) until you know this is a real offer from a serious, qualified buyer. If in doubt, consult with a business broker or advisor to verify that the price is right and the buyer is credible. 

8. Changes In Your Industry

Maybe your industry is changing so fast it’s hard to keep up. There could be advances in technology or changes in customer behavior. You may even see changes in the overall values of the industry. In this circumstance, it may be best to sell the business to a buyer better positioned to roll with the punches.

9. Time To Move On to the Next Venture

Finally, it seems like there are always new opportunities tip-tapping at your door. If a new venture is calling your name, it may be time to sell. You may need the capital for the new venture. Or maybe you just need to dedicate all your attention to it. 

After wrapping up on the “sell a business in Houston” check mark, you might set your sights on another city, like Dallas. With a state as big as Texas, you have the chance to conquer every region. 

When To Sell Your Business: Talk To a Broker Today

Keep in mind that all nine of these signs don’t have to be present for it to make sense to sell your business. In fact, one of them may be enough, or possibly a combination of several. 

Ultimately, only you can decide if it’s time to exit… but you don’t have to make the decision alone. A trusted business broker or advisor can help you understand what the exit would look like at this time and help you decide if it makes sense to sell.

Sources:

How to Value a Company: 6 Methods and Examples | HBS Online

5 Tips to Fight Burnout As an Entrepreneur | US Chamber of Commerce

Big banks needed M&A to roar back in 2024. It’s happening. | Yahoo Finance

Buying an Existing Business | Texas Comptroller