“To paraphrase John Cougar Mellencamp, businesses can go on “long after the thrill is gone.” If you are a small business owner, do you recognize the signs it’s time to quit?”- Gary Stewart
If you’re like most business owners or self-employed professionals, you’ve probably wondered how life without employees, inventory, marketing, and stress looks. Maybe you’re experiencing health issues that have forced you to acknowledge the fact that as much as you want to, you won’t be able to work in your business until they carry you out.
There are many compelling reasons that self-employed people decide to leave their businesses. Unfortunately, most are unprepared when the time comes to exit, and fewer still have a business succession plan to guide the process. Even if you are currently happy working in your company, you should be aware of these tell-tale signs indicating you need to call your advisor and start planning your exit.
The kids, spouse, or other relatives don’t want to run the company. Many business owners assume that Jr. can’t wait to take over the family business. But, even though your son, daughter, niece, or nephew may have worked with you for years, they may choose not to deal with the headaches and frustrations of running a business. Even worse, they may lack the same skills and drive that make you a successful entrepreneur.
Life events are causing you to lose focus. You may be experiencing things such as divorce, the death of a loved one, a chronic health issue, or the need to care for elderly relatives or special needs children. These events alone can cause you to feel distracted and burned out, especially as you get older. If you find yourself so overwhelmed that your business starts to suffer, it might be time to consider exiting.
The thrill is gone. When your business first started, you were probably excited and engaged. Every day brought new challenges and rewards, and you may have had a hard time going home at night. Beginnings are usually exhilarating and somewhat magical. A few years in, though, you may be dreading going into the office in the morning or choosing to play golf instead of attending a company meeting. If your business is turning into a chore on par with washing a load of dirty socks, it’s time to think about planning a graceful exit.
Your company needs a ton of upgrades and improvements. You need to update and renovate your company, but your accountant frowns every time the subject comes up. Now could be the ideal time to ask yourself if it’s worth the time and expense to pull your business into the 21st century. A thorough and accurate appraisal can give you a better idea of what your company is worth today and what it may be worth once you make needed improvements. If the numbers don’t add up, it may be time to sell.
Bottom line: It’s never too early to prepare your business succession and retirement plan, especially if you begin to see certain warning signs. It’s a wise idea to find a financial professional specializing in helping business owners exit successfully and who can turn their assets into income streams.