Welcome To Arch9ja Blog: 234Finance: When It’s Time to Sell Your Company

Friday, 31 March 2017

234Finance: When It’s Time to Sell Your Company

Have you ever considered selling off your company?

It might not be what you want, but it may be the best option. Running a company is full of challenges. As enthusiastic as you may be, sometimes an angry customer will rage in, your passion and savings might whither, leaving you to wonder whether to keep on or sell off your company. Here are five signs that it’s time to sell your company.

Passion runs out

You need a high level of energy and passion to run a business. Like a fuel that powers a vehicle, passion gives you the push you need to work hard and persevere, even when the odds are against you. When your passion runs out, your energy depletes and this reduces your productivity. Instead of showing up early in your office, you’re coming in late. The reason is that you don’t enjoy doing the “work” anymore. You don’t spend the long hours you used to in executing a project or building a new idea. When these feelings persist, it may be time to sell your company.

The business model is not viable
Your company is 3 years in operations. Out of a crazy idea, you managed to build a great product, a competent team, and even injected some capital to kick-start your company. You have done all your homework – product research, market analysis, customer validation, and your company is still not making money. You have tweaked your product a number of times and still, the business isn’t profitable. At this point, you finally realize that your business model is flawed; the best option may be to sell off your company and move on.

Lack of human capital to help you scale
Your business model is perfect: customers are buying your products; your revenue is improving. So you focus on growing your business but you don’t have the resources needed to recruit the right team to scale your business. You may have tried to secure funding to employ the team you need to scale your business, but it isn’t forth-coming. If you find yourself in this situation, the best option may be to sell your company (or part of it), to a more established organization with more capable hands to  scale the business.

No funding  to run your company
Funding is the most important resource you need to run your company.  The major reason for most startup failure is due to lack of funding or inefficient cash flow to run the business. Even if you have an amazing idea, you cannot execute it without money. Of course, most founders inject their personal savings in their startups and go broke at length. If your savings run dry, while your company is not yielding any profit, it’s time to sell it to someone who can take care of it.

No other option
If your company is not getting any traction nor yielding any profit, after years of pouring your sweat into it, what are your other options, aside selling it? As Kate Harrison, a startup-marketing expert points out, “how attractive a sale will be depends entirely on the context of what else is happening in your space, in your company, and in your personal life”. Let’s face it, if your company is not getting the traction it needs to be really successful, Glit’s founder Kevin Ryan, says “The faster you can move on, the better for everyone involved.”
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