While many of us will enjoy running our own business, there comes a time when it makes sense to let go and move on. Quitting while you’re ahead can help you to end on a high note, while maximizing your profits, and avoiding burnout.
But when is the perfect time? How do you know that you’re ready and your business is ready? Here are some signs.
The Industry is Struggling/The Fad is Wearing Off: Of course selling a struggling website or business isn’t going to be the best move in terms of profit though – much better would be to be able to sell before it got to that point in the first place.
If you know that your niche/industry is something that’s about to lose popularity, then you would have the opportunity to try and sell before the money stops coming in. You might view this as “tricking” your buyer, but as long as you are honest in your valuations, you are giving them a fair chance to weather that storm. Perhaps they have the necessary assets to handle a quiet period and to wait for it to pick up again?
This might also be a good move if you notice that the industry is changing. For example, Polaroid might have considered selling its business as soon as it saw the first digital camera hit the market. Keeping one eye on the future using “counterfactual simulation” (as described in The Personal MBA by Josh Kaufman) is a good way to stay one step ahead.
Speak with business brokers if you want advice on this front.
You’ve Seen a New, Better Opportunity: Perhaps your business is cruising along nicely, but you’ve spotted an amazing new opportunity. You could cash out of your current endeavor and then invest the money you earn from that into this new business. That, in turn, could be a huge opportunity to grow. Time for a fresh challenge?
The secret to success in business and finances is to reinvest your earnings wisely. This is a great way to take the next step.
Your Business Never Took Off: You might find that after years of hard work, your business never gains the traction it should. The temptation is to not give up – to keep working at it until it does succeed to prevent all that previous work from having been in vain. However, this can also backfire and simply lead to even more wasted time, money, and motivation. Knowing when it’s time to call it quits is an extremely valuable business skill.
Your Profits Are Peaking: While there are many ways to value a business, profits are still going to be one of the biggest determining factors when it comes to the price you eventually sell for. Therefore, it makes a lot of sense to sell once your business starts performing extremely well. You might never reach this high point again, so take the opportunity to cash out!
You Aren’t Enjoying it Anymore: Whether your business is doing well and you simply don’t enjoy the daily grind, or whether it hasn’t quite taken off in the way you thought it would and it is now grinding you down… whatever the case, there might come a point where running your business no longer brings you any joy. When that happens, you may wish to consider selling up and starting something new.
Remember, you probably begun this enterprise as a passion project. You were probably excited to spend time making money doing what you love. If it no longer feels like that any more… then what is the point? Time to call your business broker!