Many business owners encounter this question “Should I sell the business or keep it?” Reasons for selling a business are many: family commitments, retirement plans, falling out with the business, or simply having a desire to start a new project.
Rather than buying, selling a business is troublesome as it involves several considerations. It requires you to assist an accountant, a broker, or an attorney as you proceed to sell it.
Therefore before proceeding further, ask these questions to make the right call.
Q1: Can Business Be Sustained in the Long Run?
Think about whether your business can start working better with a small change or competition?
For instance, the infrastructure of the business. By simplifying the infrastructure, an entrepreneur can keep operations running, and where you don’t need to renovate the things always.
Another example can be a services-based association that can replace the latest trends to chase the fast-paced industry. Deploying the latest trends and technologies in the organization can also help such as a software as a service (SaaS) business.
Dealing with a business also considers the factor of whether you want to constantly introduce your products or services, and are willing to manage constant change in the assiduity.
Q2: Can a business be passed on?
Many business owners use to get attached to their company and they don’t want to give or sell it to a stranger. Rather than giving it to a stranger, they want to see it in the hands of a close relative or friend.
To this point, you need to consider having a serious conversation with any potential “heirs’ ‘ of the business and let them know that they are actually interested in running the business or just interested in taking it over.
Q3: How does your business generate income?
Learn what are your USPs and how you can generate the revenue. This analysis will help you to understand the key elements of your enterprise. This is the most basic question an entrepreneur should ask themselves, even before starting a business as well.
A simple way to collect this information is to get feedback from your customers. You can ask them why they like your products or services. What are the reasons they keep visiting your place?
This will not only help you to know the USPs of your business but also help you connect with your customers and build a strong connection with them.
Q4: What do you and your team do to generate revenue?
If you are not able to generate revenue then there must be some flaws. It may be the higher cost of the products and services or maybe you are spending more on employee payroll. Your expenses are too high—and a high expense sinks companies in the long run.
How will you find it out? Explore your production unit and expenses or review your payroll and categorize each employee as income-generating or overhead. Be honest with yourself and your business.
Before Selling It Out
If you are selling your business you need to think twice. There are many things which you can consider before selling your business. Selling a business should never be a spur-of-the-moment decision, hence you need to have a clear picture.