ENTREPRENEURSHIP / DEC. 03, 2014
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How to Decide if it is The Right Time to Sell a Business

Selling a company can be an exciting, sad or stressful experience. There are many items to consider before selling your company and timing will be a determining factor to get your asking price. These are some of the reasons you may want to sell your company.

Expanding waistlines

The more you feed your vision the larger it will become, not unlike a waistline. If you try to fit that waistline (your vision) into smaller pants you’re bound to blow a seam. In a non-metaphorical sense the “blown seam” could be your ambitions that you must sacrifice because the scale of the company can’t handle the scope of your vision. If you value personal development this could also start to inhibit your motivation, creativity and drive. Tight pants may look good, but they just aren’t as comfortable as an elastic waistband (that is both metaphoric and literal).

For a real-world example, you can take a look at gaming company’s founder Markus “Notch” Persson. He sold his company Mojang (and the property Minecraft which has sold 27,659,254 across all platforms) to Microsoft. His interests lied in creating not managing monumental properties such as Minecraft. 

The Struggle

Sometimes circumstances force you to consider selling your company. If you feel like you’re playing Jenga with your company’s finances, taking funds from shaky places and redistributing them to other places and hoping the whole thing won’t topple, then it may be time to sell. Being an owner of a company like this may drain you of all passion and leave you mentally, emotionally and physically tapped.

Viability

A follow up to the previous point and a silver-lining in a cloud of stormy finances, is viability. The business may be going through a temporary crisis but if a model or paradigm is in place and can make the business viable then it might mean you need to hold off on selling your assets.

Netflix is a great example of viability as compared to Blockbuster as an example of the non-viable. Starting with mail-rental dvd services when internet speeds increased Netflix split their company into streaming and physical media. This cost the company so they remerged the two divisions and corrected their loss. By the time Blockbuster had decided to delve into streaming media, Netflix had such a large market share that it was almost impossible to penetrate the market. Blockbuster closed its last retail store in January of 2014. Netflix on the other has producing unique content (that have won multiple awards). 

The deal’s too sweet to beat

If your company is not only healthy but exhibits exponential growth or owns a vastly popular or profitable property, you might have someone knocking on your door (with fistfuls of money). Much like Don Corleone from the Godfather, they’re going to make you an offer you can’t refuse. It happens quite often and some company owners actually can retire from the acquisition of their company.

I’ve already mentioned Mojang with its Minecraft property yet another company associated with the gaming world, Oculus VR, also underwent a high profile “buy-out” this year. For the uninitiated Oculus VR produces a virtual reality head-set that moves the image in accordance to the users head position. This makes it a much more natural and intuitive user experience than using a different interface. Early this year Facebook acquired Oculus VR for 2 billion dollars.   

 See also : 5 Crucial Factors to Consider Before Selling Your Site

Have you ever sold your company? Maybe you’ve considered it but changed your mind. Let us know what influenced your decision the most in the comments section below.

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