The majority of business owners have the wrong idea about selling their company earlier than expected.
C’mon, you are not giving yourself any credit here. I have talked to so many business owners that just have it wrong. They’re hanging their head and kicking themselves for absolutely no reason at all when they are facing the possibility of selling their company. To put it in perspective, I wrote this article to paint the picture in the “accurate” light.
Congratulations, You Grew a Company and Beat the Odds!
Seriously, you crushed it. You had a vision, you let nothing stand in your way. Your idea was a spark that grew this awesome thing that people needed.
Fact: According to the Small Business Administration (SBA) roughly 30% of all new businesses fail during the first two years. 50% of all businesses fail during the first five years. 66% of businesses do not make it past the 10-year mark. The SBA states that only 25% make it to 15 years or more.
So if you made it past the 2 year mark, you beat the odds and did something most would not have the courage to do, start a business and grow it. Pat yourself on the back!
You provided for you, your family and others.
You may have grown your business and done very well with 15%+ Net Profits or maybe higher and really paid yourself well and socked some money away for retirement. But for most, you probably don’t feel quite as successful. What you have to remember is the shear volume of income you were able to bring in and pay yourself a salary that took care of you and your family. Plus, if you had employees, you provided income for them and opportunity to grow in their career. You got to run your own schedule that gave you freedoms you would not have working for “the man”.
Success is not measured in dollars alone. It’s a great indicator, but not everyone who owns a business has the goal of being filthy rich. Although I don’t know too many people who would mind if that happened. Congratulations again, hopefully, you did well for yourself, you made a positive impact on all those around you and enriched their lives in the process.
Their is always a beginning and end, kind of…
Did you have a vision of starting a company and retiring in it? I know this journey well as my father had owned a grocery store for over 30 years and retired from the grocery business. Understand that this was a popular, sought after choice decades ago. But in today’s fast-paced business world, it’s more rare than you think.
Although you can see an end to owning your company, it doesn’t mean an end to your entrepreneurial journey. Selling your current company, could just get you the money you need to make a downpayment on buying a different company that yields more profit and pays you much more than you are making now and could offer less risk also.
So if you are sad and know that you must sell the company you have, then maybe consider that it was a stepping stone to get you to where you really are going after all! The end in this case, creates a new, healthy beginning.
And finally, if it’s time to retire, then yes, it’s the end of your career. But the beginning of your retirement. Go forth and be a successful retiree and enjoy. The next part is definitely for you!
You built something of value and now it’s time to sell it.
Most business owners do not get to sell for millions of dollars at the end of it all. But considering all the above, yes, now you have something you “created” that has value and worth. In order to sell your company, you will need to prepare to show real profits. We recommend you work with a professional business broker to get properly prepared to list your company. If you are reading this well in advance, spend the next year or two, showing a net profit on your tax returns. This is “proof” to a buyer and their lending bank that you were running a first-class operation that is worth investing in.
So get the most from your hard work and ownership and go out on top. The more profit you show, the more you will get. Please do not use revenue alone as a multiplying factor to determine your company’s worth. Your accountant most likely will not have any ideas on current market values.
Conclusion: If considering selling your business, don’t feel like you’re throwing in the towel. Instead, get ready to reward yourself with some hard-earned cash you deserve.