Every business has a lifespan. Thinking of it as the circle of life is a healthy approach.
According to studies, 20% of businesses fail before reaching the 2-year mark, close to 50% fail within the first 5 years of operation, and a little less than 70% fail before hitting the decade mark.
It’s important to know when you should sell your business, so you can capitalize on a good opportunity.
Should you consider selling your business now? If so, what are the key reasons to keep in mind? We’ll explain those points in detail below.
Your Business Is at Peak Value or Attractiveness
When asking “How do I know if I should sell my business?”, look no further than the current value.
There comes a time when your company reaches the highest value it likely will before experiencing a dip or a plummet. If you’d rather not ride the ebbs and flows, it may be best to get out on top.
The best way to know this is by hiring a company to offer a valuation.
Business valuation firms constitute a roughly $3 billion industry. This points to their importance and usefulness in the business climate.
The Industry Has Evolved Beyond Your Desire or Capability
Take a look at your industry and whether or not your company is keeping up. Even the soundest business strategies can’t overcome a company that has been left behind with the new way of doing business.
If you find yourself getting left behind and are unable or unwilling to keep up, it might be best to sell, rather than try to keep up for the sake of it.
You may also just not have the desire to keep your business afloat.
Health is a major reason that business owners sell. Not only do close to 50% of entrepreneurs surveyed deal with depression, but heart disease, circulatory problems, and migraines are also major risk factors.
When your health is threatened, selling the business can be a good way to heal and move on to the next chapter.
Is your business exit ready?
If you’re planning to exit your company in the near future, you may find EastWind’s Exit Strategy Playbook helpful in developing your own exit strategy, making your company more sellable.

You Own a Struggling Business With Potential
Even if you have a failing business or a struggling business, it’s still possible that your company holds massive potential.
Perhaps your business isn’t growing but has steady cash flow on a regular basis. You might own quality real estate or intellectual property that holds a lot of value that another owner can capitalize on.
A prospective buyer who takes a look at your books will be intrigued by this and will likely see the value potential that your company has.
There Are Better Opportunities on the Horizon
Finally, you might choose to sell if you have better opportunities. Perhaps you’d like to divert your attention so that you can focus fully on this new opportunity without splitting your efforts and time.
Having an exit strategy in place for your company will help you extract the most value out of any sale that you look into. A merger and acquisition advisor can help you come up with a game plan that lets you know your next possible options.
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