In any business venture (startup), things won’t always go as planned. There are obstacles, challenges and many other unforeseen circumstances that can hinder you from creating the type of business that you originally envisioned.
This is especially true for many startup businesses. Sometimes, it is just hard to keep up with the competition. But even if your company is already on the brink of closing. You can still opt to sell it to an interested investor or merger who might have a different vision for the company’s direction.
Saying goodbye to something that you worked so hard for might be difficult, but if things are not going exactly too well, selling your startup business is somehow the easier way out. Even though you need to let go of the company, the compensation you get from the acquisition can, however, help you move forward and embark on another journey. So overall, it’s not that bad – at least you get enough resources to be able to stand back up again.
But what if your startup actually has a potential to turn around from its current losses? How would you know if the situation should call for an acquisition, and not just a change of strategy or management? To know if it is high time to sell your startup or not, we listed down five tell-tale signs below:
The business is constantly incurring losses.
This is one of the most obvious signs that can tell you that your company might be in need of better direction and management. It is normal for your startup to incur losses during the first few months up to 2 years. Since its establishment, but if you still keep losing money during the third year and so. Then, it is time to find an entrepreneur or investor who is interested in buying you out.
You are unable to cope up with new technology and trends.
New technology can help you expedite business processes and keep up with stiff competition (via digital marketing and the like). However, if you find yourself having a hard time adapting to these rapidly changing trends. Then, it may be time to hand over the company to someone who knows how to cope up with technical strategies and plans.
The company itself has outgrown you.
Your startup might have grown into a more stable and larger office space. Normally, it will have entirely different needs compared to when it was still starting out. By this time, you need more managers to oversee your employees. A dedicated HR team to ensure compensation and benefits are given equally to everyone at the right time, accountants, supervisors. Probably new departments to cater to specific needs.
If all that seems too much for you, and if you think other people have more knowledge and experience to carry out a larger company, then it may be time to sell it. The great thing about a booming startup however is, you can sell it at a good price.
Managing the company has burnt you out.
It is the reality – many start-up entrepreneurs put on too much pressure on themselves that they end up taking antidepressants, pills and additional supplements just to keep them focused and functioning.
Pushing yourself too hard can be detrimental to your mental and physical health. This could negatively affect your business in the long run. If your startup does not excite you anymore but had instead drained you mentally and physically. Therefore, it’s time to let go for your own (and the company’s) good.
You have a newfound passion.
Our interests could change from time to time. So, if ever you find yourself in love with a different niche (or project), allow yourself to clear up some time to focus on that instead. It is best to just turn over the company to a more dedicated entrepreneur that might have the focus and enthusiasm. This could lead the business into the right path and growth.
Selling your startup should not necessarily proceed from a dismal loss. This is because your own skills and enthusiasm is still a big factor. Whenever you think the company is better off with a different leader, then it might be time to let go of it.
This is not just about your own growth or journey. It is also about ensuring that your company survives and that your employees can still be secured in their positions even after you decide to leave.
Gemma Reeves is a seasoned writer who enjoys creating helpful articles and interesting stories. She has worked with several clients across different industries such as advertising, online marketing, technology, healthcare, family matters, and more. She is also an aspiring entrepreneur who is engaged in assisting other aspiring entrepreneurs in finding the best office space for their business.
Check out her company here: FindMyWorkspace