6 Signs You May Be Ready to Sell Your Business

How do you know it’s time to sell your business? It’s not always obvious when it’s time to move on. Many entrepreneurs don’t realize it until circumstances force their hand.

It’s important to identify key indicators that would encourage you to sell your company. Sometimes, the reasons are to pursue your own passions, while other times, external factors may encourage you to sell. 

Knowing when to exit can help you make the most of all the years, experience, and expertise you’ve devoted to the business. 

Here are a few ways to identify when the time comes: 

1. Leadership Fatigue: When Passion Wanes, Performance Follows

Fatigue and burnout can severely impact business performance. Studies show that 32% of executives experience burnout, which can affect their ability to lead. This, in turn, affects operational performance and employee morale, which may lead to negative business outcomes. When burnout affects your passion, you may wish to consider an exit before it starts affecting sales. 

The emotional journey of letting go also includes making peace with the fact that you’re no longer the one calling the shots. Start to prepare yourself for what’s to come by: 

• Planning your exit ahead of time for a smoother transition
• Mapping out your goals and vision for the next chapter with clear steps to get there
• Taking some time between the sale and your next role to relax

2. Your Business Has Peaked Financially: Sell While It’s Most Attractive

When you sell during the peak, you have the opportunity to benefit from higher value, which means you can demand a higher return. Exiting at the peak means that you’re selling while things are going strong, with thriving sales, recurring customers, and solid growth. 

A well-timed exit attracts serious, strategic buyers. A professional broker can help assess your market timing. If you’re thinking, “It could be time to sell my business in Kansas City,” consider working with a broker who has the know-how to leverage your company to the ideal target market. 

3. From Visionary to Manager: Your Role Is No Longer Strategic

Hands-on business owners may have the joy of knowing their business inside out. The danger in this is getting so entrenched in the daily operations that you’re no longer looking at ways to make the business more sustainable for the upcoming change of ownership. 

Studies show that 84.6% identify as business owners and senior leaders within their companies, but only 19.2% of these leaders have created a successful exit strategy. When you’re deeply entrenched in daily operations, the business starts running you. This leaves little room for strategic thinking or long-term vision.

4. Buyers Are Knocking: Unsolicited Offers May Signal It’s Time to Sell

When you sell your business, you want to get the best price for it. When buyers are lining up to buy your business, this is a prime opportunity to negotiate. A high-value business feels like a safer bet to potential buyers. 

Ways to vet whether the offers are legitimate include: 

• They ask specific questions.
• They’re willing to sign a non-disclosure agreement.
• They’re transparent about their intentions.

The one thing to be wary of with unsolicited interest is the threat of lowball offers. Lowballs aren’t necessarily meant to insult — they show you have something that other people want. In a way, it’s a compliment, but it’s essential not to get pulled in by a deal that undervalues your company. Talk to a business broker to help ensure the sale price is fair and what you deserve. 

5. Your Life Has Changed: Now It’s Time to Rethink Ownership

Major lifestyle changes often propel business owners to exit. Research shows that 74% of business owners thinking about retirement planned to sell their business. These business owners reported that selling their company would improve their personal or family financial position.

Other reasons owners might sell their businesses include health issues, family obligations, relocation, or shifting priorities. For owners, the shift may happen when owning a company no longer adds value to their quality of life or aligns with their desired lifestyle. Maybe retirement is their next big step, or maybe new entrepreneurial ventures call them. 

6. You’re Ready for the Next Challenge

Just like people change jobs, business owners can outgrow their companies. Some of the signs that you might be growing restless include: 

• You’re daydreaming about starting something new.
• Making more money won’t increase your satisfaction.
• You feel like your business no longer aligns with your values or goals. 
• You’re not excited about coming to work and running your company.
• You want to retire.

Is It Your Time to Sell?

Even if it’s a tough decision to make, selling your business can also be strategic. You want the most value for money and a way out to pursue the next phase of your journey. Partnering with a skilled professional such as a business broker can help achieve your desired outcome.