Ready to Sell: A Guide for Business Owners

We recently received a question from a viewer of our Chalk Talk podcast on YouTube –Craig asked, “When do you know it’s [your business] ready to sell?” Let's explore the insights and strategies we shared to help make an informed decision.

When business owners start their journey, they often have a set of hopes and dreams for what their business will achieve. These dreams may include financial freedom, quality time with family, or the ability to pursue personal passions. As time goes by, it's essential to reflect on whether these aspirations are being fulfilled or if adjustments need to be made to reach them.

Understanding the Exit Strategies

Every business owner will eventually face the decision to exit their business. There are three primary exit strategies / paths to consider:

1. Transitioning to the Next Generation: For family-owned and operated businesses, passing the torch to the next generation is a common goal. Many business owners envision their children or grandchildren continuing their legacy.
2. Outright Sale: Sometimes, it becomes evident that it’s time to sell the business and move on to new endeavors. This could be driven by personal circumstances, changes in the market, or simply a desire for a fresh start.
3. Creating Passive Income: Another option is to establish a strong leadership team and delegate day-to-day operations, allowing the business owner to step back and enjoy a more passive role. This approach provides the freedom to pursue personal interests while still benefiting from the business’s success.

Determining When it’s Time to Sell
To know when your business is ready for sale, it's crucial to identify your expectations and desired worth at the point of sale. Similar to planning a vacation, envisioning the destination helps map out the journey. However, this process to be at the point of sale may take longer than anticipated, we typically recommend to start planning three to seven years in advance of target date.
To get started, assess your current business value by utilizing tools like a business valuation. This analysis considers assets, income, and cash flow to provide an estimate of your business’s worth. Armed with this information, you can then plan the necessary steps to bridge the gap between your current value and your desired worth.

Beyond Financial Goals
While financial aspirations are common, it's essential to consider other factors that define success for you. This could include the number of customers you serve or the impact you want to make in your community. By identifying these non-monetary goals, you can create a more comprehensive roadmap for your business's future.

The Power of Clarity
Going through the process of defining your end state and success criteria brings incredible clarity. It allows you to make informed decisions and evaluate your progress along the way. Achieving this clarity can be liberating, as you gain a clear understanding of what truly matters to you and your business.

Embracing Flexibility
As you work towards your goals, it's important to remain flexible. Sometimes, you may achieve your desired outcome sooner than expected, while other times, it may take longer. Being open to adjusting your plans and evaluating your options along the way ensures that you make the best decisions for yourself and your business.

Knowing when you're ready to sell your business is a deeply personal decision. By considering your hopes, dreams, and aspirations, as well as your desired financial worth, you can create a roadmap that aligns with your vision of success.recognizing the unique needs and experiences of team members, leaders can optimize the delegation process.

Only Action gets you closer to your dreams - do something today that your future self will thank you for.

-Coach Rory Sheppard