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How do you know when it is time to sell, retire or refuel?
I started my small business 22 years ago and have enjoyed a measure of success. I am tired of looking for the right person to take over, tired of training the ones I think may work and tired of managing employees. I love my business and the freedom it gives me, but after 33 years I'm looking forward to retiring, but don't know how. As a service business, I don't think I can get what I need if I sell it. Companies want me to stay on, which defeats my purpose!
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- "I don't think I can get what I need if I sell it" is a very powerful statement. Fully analyze that guess. Talk to some business brokers. Investigate standard formulas for valuing your business based on sales or profits or whatever. A business is worth what somebody else will pay for it.
- With a service business buyers do want the key people to stay because most service businesses lose their most important assets every night when people go home. Do you think you have a better choice than promising to stay on for two years? You don't say how old you are but after 22 years in business you probably have a sense of how fast time goes by, how quick two years really is (note: I just turned 60, so I think I know). Do you have a better option? Do you want to have this same situation five years from now?
- One of the best pieces of advice I ever got was: "know what knobs you have to turn." If you can't sell your service business without staying on for a few years, don't you want to do it sooner, not later? Won't it be worth even less five years from now, as you get older?
Tim
Tim Berry is the president of Palo Alto Software Inc., which produces the industry's leading business planning software, Business Plan Pro, as well as other popular planning applications for businesses.
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