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.