July 30, 2015 HMA Website

7 Signs Your Ready To Sell Your Business

By Denise Rondini, Vice President of Hart Marx Advisors

It’s not easy to decide to sell your parts/service business. If you are like most owners of a distributorship or repair garage, you have probably been putting your heart and soul into building your business. In some cases you are even carrying on a long-standing tradition of running the family business. 

Sometimes external factors like illness, divorce, a health emergency or death, force the sale of a business, which is rarely a good thing and often results in the seller not getting the best value for his or her business. 

Other times business owners willingly sell their businesses. If any of the following reasons resonate with you, it might be time for you to begin the process of preparing your business to be sold.

1. If you don’t care, why should they? 

If your passion for the business has fizzled, it is time to sell. Whether you know it or not, your attitude will affect the success of your operation. Your employees will sense you have lost your zeal and that will impact the amount of effort they put into doing their jobs. If you don’t care, why should they? Your customers, competition and suppliers will surely notice your diminished interest. This ultimately will have a negative impact on business performance which could lead to decreasing revenues and a reduction in the value of the business.

2. You like your job, but are tired of being in charge.

You love the work you do, but are feeling overwhelmed with the responsibilities that come with ownership. For example, you find it very rewarding to find just the right part for the customer who comes in seeking advice on which part is right for his or her application. Or you take pride in not only finding the obvious problem with a customer’s truck, but also ferretting out the root cause which ensures that problem will not recur. What may be less rewarding is dealing with personnel issues, the bank and the attorney. You would like to continue running some aspects of your business, but want to let go of the reins and the responsibilities that come with being the person in charge. Thus, if the management responsibilities have become burdensome, consider selling. One word of caution – carefully consider if you could work for someone else after having been the boss. If you want to continue to be involved, you will have to get used to someone else calling the shots.

3. You have a plan for the next phase of your life.  

You have dreams of doing something else with your time. Writing the next Great American Novel, traveling the world, or starting another business. You know exactly what you want to do next and the only thing stopping you is the time and money to do it. Selling your business could get the next phase of your life off on solid financial ground.

4. You feel like you are missing out on important events in your family.

It hits you one day that you have missed too many major events in your family’s lives because of the hours you must keep as a business owner. If you want to make family your number one priority, sell your business to someone who has the time to devote to nurturing it so you can focus on what’s most important to you.

5. You want your business to grow, but don’t have the skills and resources to take it to the next level.

Remote parts of your market are underserved and you know that adding a location would allow you to serve those customers better and attract new business. You see great potential for your business to blossom, but realize you don’t have the skill set, nor the financial resources, required to take it to the next level. Look for a buyer who has the people, technology and financial wherewithal to grow your business into something better.

6. Retirement is in sight. 

You know when you want to retire and the date is on the horizon. Preparing to sell a business takes time, so don’t wait until your retirement date arrives to start the process. If you wait until you actually want to retire to try to sell your business, you likely will find yourself postponing your retirement or you might be selling the business for less than optimal value.