7 Signs It's Time to Sell Your Business
How to decide if you should sell your plumbing or HVAC business
Deciding to sell your business is a big step, and to ensure you get the best arrangement possible, you need to select the right time to sell. In addition to surveying the market, you also need to assess your business's strengths and weaknesses and your personal situation to identify the optimal time for a sale.
Trying to decide if you should sell your business? Here are seven signs that the time is now.
1. The challenges of running your business are no longer exciting Your business exists to turn a profit, but you also deserve to enjoy running your business. If you've lost passion for your business and it's creating more stress than it's worth, it may be time to sell.
The challenges of running a start-up are exciting for most entrepreneurs. They enjoy the challenges of creating business plans, figuring out financing, trying to gain market share, and developing their products and services.
However, once these quests have been conquered and your challenges shift to mundane personnel issues such as hiring, firing, and disciplining employees, you may be bored and ready to move on to something new.
2. Your skills don't match the company's needs Businesses have different requirements at different points in their lifecycles. If your skillset doesn't provide what your company needs now, you may want to consider selling. As explained above, many entrepreneurs enjoy the initial challenges of establishing a successful business, but they may not want to deal with the day-to-day chore of sustaining an HVAC or plumbing business.
In that same vein, some entrepreneurs are great at sales, providing them with valuable skills to launch a business. But when an HVAC or plumbing business gets past $5 to $10 million in revenue, founder selling can begin to hold a business back, it often requires a different leadership style to thrive and survive.
Admitting that you don't have the right skill set is not a failure. It's a step toward success because it allows you to reap the rewards of what you've built while also giving you the opportunity to move on to something new.
3. You have move lucrative opportunities In addition to considering whether or not you want to continue running your business, you should also think about what you could do if you didn't have to run your HVAC or plumbing business. Perhaps you have a new business idea in mind. Maybe a colleague has offered you a job or you want to leave the full-time grind and become a consultant. Or you might just be ready to retire.
4. You can no longer tolerate the risk As someone who owns an HVAC or plumbing company, you carry the risk of that company's profits and losses. At times, this can translate to big wins, but at other times, it means pulling in a lower salary than you could earn working for someone else.
Most people's risk profile changes during their life. When you first start your HVAC or plumbing company, you may be fine existing on a tight budget and not worry too much about the risk of losses. However, as your financial needs change and you get closer to retirement, you may want to minimize your risk. In some cases, selling your business is the best way to eliminate risk from your financial profile.
5. You can't see a clear path to success There are many different roads to success, and if you cannot see a path forward, you may want to consider moving onto different opportunities. A consultant can help you look at the big picture and try to figure out what path you should take. But if you've been in the HVAC or plumbing industry for a while, you can probably see when there's no legitimate path forward with your resources without hiring a consultant.
In that same vein, you may see what you could do to drive your company forward but simply don't want to deal with that operational reality. In both cases, you may want to sell. If your business is struggling, selling allows you to capitalize on what you've built without going into an excessive amount of debt trying to keep your doors open.
6. You're ready to retire The desire to retire is also a valid reason to sell your business. If you don't have anyone to take your place, selling may be the best option. Many people want to work a little bit during retirement, but putting in a few hours is a lot different than single-handedly running your own business.
You've worked hard during your lifetime, and now it's time for you to enjoy your golden years. Again, you need to consider how running your business makes you feel. If you're still passionate about it, you may want to stay in the game for a few more years. If you feel a lot of exhaustion and dread, it may be time to move on.
7. Your business can run without you Buyers look for all kinds of scenarios when they are shopping around for a business, and they purchase businesses in a variety of states. However, sellers tend to get the best price when their businesses can continue to run profitably without them.
If your business can run independently, it becomes more attractive to buyers because they can simply invest financially. They don't have to actively participate in the business. If you can hand someone the keys to a business that basically runs itself, you're likely to get a bigger payout. If your business is not at this point yet, that doesn't mean you can't sell, but you may want to take some time to develop a business that doesn't rely on your presence on a day-to-day basis.
Running a business should be fun and profitable. If you're feeling bored or exhausted, it’s probably time to consider selling. Additionally, you need to consider your business's strengths and weaknesses, and in some cases, you may want to spend a few years improving certain aspects to help attract a more qualified buyer. A mergers and acquisitions specialist can help you assess your business and determine if it's time to sell.
Contact SF&P Advisors At SF&P Advisors, we specialize in handling mergers and acquisitions for businesses in the HVAC and plumbing industries. Wondering if now is the right time to sell your business? Then contact us today. We can offer a free valuation of your business and help you decide whether or not now is the best time to sell.