The toughest decision I have ever made with regard to my business
is selling them. I participated in an entrepreneurial class in which
the teacher indicated that the time to plan selling your business is at
the start.
I am a big believer in small business planning however it was always hard to make decisions about selling any business in the beginning stages. Emotions are running high, the excitement of a new adventure underway and the struggles that can come with a new business all put planning for the eventual sale of your business in the back of your mind if at all.
In this discussion however I will address two times that may make sense to sell a business, and one all of us hope to never face. Probably the most difficult decision you will make with regard to your small business is when it becomes obvious that the business will not make it and you must cut your losses. Number 2 when it is time to move on to new challenges or it makes financial sense. There is also a third stage and that is when the business has out grown your expertise.
The third stage can be tough to recognize. When you start a new small business in many cases you may be underfunded or assets are stretched in other ways which dictate that you do as much as you can to make the business prosper yourself. That may include marketing, accounting, hiring, firing, and working countless hours in the business. As the business grows and you have the finances, you can hire expertise for many of the duties that you yourself used to take care of.
If the business grows past your ability to manage it or take it to the next level it may be time to bring on more expertise or sell it and move on to other ventures. Only you can decide in concert with your trusted advisors when that time is.
I want to address something much more difficult and that is when you must in so many words cut and run. This may be the toughest business decision of all. I was called in to advise a small business owner on the state of his business, and after a few hours of accessing the books, the affairs of the business, and interviewing the business owner, it became obvious that the business must be closed. The business owner could get out without risking more personal assets.
I spent many hours building the case to the business owner that he could close the business and get out with a positive cash position. It was in vain, the owner had so much invested emotionally that he could not see himself getting out. 6 Months later he was forced to close the store. I can only assume that if business sales followed the forecast I had predicted he needlessly lost another $50.000
I am a big believer in small business planning however it was always hard to make decisions about selling any business in the beginning stages. Emotions are running high, the excitement of a new adventure underway and the struggles that can come with a new business all put planning for the eventual sale of your business in the back of your mind if at all.
In this discussion however I will address two times that may make sense to sell a business, and one all of us hope to never face. Probably the most difficult decision you will make with regard to your small business is when it becomes obvious that the business will not make it and you must cut your losses. Number 2 when it is time to move on to new challenges or it makes financial sense. There is also a third stage and that is when the business has out grown your expertise.
The third stage can be tough to recognize. When you start a new small business in many cases you may be underfunded or assets are stretched in other ways which dictate that you do as much as you can to make the business prosper yourself. That may include marketing, accounting, hiring, firing, and working countless hours in the business. As the business grows and you have the finances, you can hire expertise for many of the duties that you yourself used to take care of.
If the business grows past your ability to manage it or take it to the next level it may be time to bring on more expertise or sell it and move on to other ventures. Only you can decide in concert with your trusted advisors when that time is.
I want to address something much more difficult and that is when you must in so many words cut and run. This may be the toughest business decision of all. I was called in to advise a small business owner on the state of his business, and after a few hours of accessing the books, the affairs of the business, and interviewing the business owner, it became obvious that the business must be closed. The business owner could get out without risking more personal assets.
I spent many hours building the case to the business owner that he could close the business and get out with a positive cash position. It was in vain, the owner had so much invested emotionally that he could not see himself getting out. 6 Months later he was forced to close the store. I can only assume that if business sales followed the forecast I had predicted he needlessly lost another $50.000
My name is Steve Whitaker, I have been a lifelong entrepreneur
owning several businesses in 5 different business categories. It is my
desire now to help existing and new entrepreneurs. I mentor and consult
on occasion. I live in the Black Hills of South Dakota with my wife
Connie. My only contact right now for further questions is P.O. Box 516
Hermosa, SD. 57744. Drop me a note with a email contact and you will
receive an answer.
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