This post is contributed by Jason Dirkham

Your business is your baby. You’ve nurtured it from a tiny spark of inspiration to a thriving enterprise with your very own phalanx of employees. You feel an enormous sense of accomplishment in what your business has achieved and personal pride in the apart you’ve played to get it where it is… But for all that there comes a point when it’s best for all concerned for you and the business to part ways. It’s not an admission of failure, nor is it the same as abandoning your child now that it’s old enough to fend for itself (although it can certainly feel like that). The simple truth is that entrepreneurs and their business develop at different rates, in different ways and as part of their natural growth they may find themselves growing in different directions. You feel it may be time to move on, yet, as a risk averse entrepreneur, you want to feel assured that you’re not making a mistake. Here are some signs that it’s time to sell your enterprise and move onto the next project:

The 5 Ds

In the exit management industry, around 50% of the time, the reason for selling a business comes down to one of the 5 Ds. These are involuntary and unforeseen and as such savvy entrepreneurs need to have contingencies in place to mitigate their effects. They are:

  • Death
  • Disability
  • Divorce
  • Disagreement’
  • Distress

Any one of these can seriously impair your ability to effectively manage your business, but by ensuring that you and your business partners have provisions in place you can ease the transfer of the business out of your hands without detrimental effects to your business or your personal finances.

A better opportunity has presented itself

Your skills, knowledge and expertise have allowed your business to grow and thrive… But that shouldn’t preclude you from bringing your skills and knowledge to bear on another business that could prove even more fecund and lucrative. If you feel that your current market is stagnating and you could transfer your skills to an opportunity that affords a greater chance of upward progression, you owe it to yourself to seize the opportunity. Likewise, if your enterprise just barely turns a profit year after year, but a multinational corporation offers to buy you out, it may be worth seriously considering the offer.

You need to free up your capital

Entrepreneurs are well known for putting their money where their mouths are. Many of them not only sink vast quantities of their time and effort into their enterprises, but large sums of their own capital too. When that seed money starts to reap dividends, they most likely re-invest their gains in the capital investments that facilitate further growth. While this can see the business prosper and flourish, it can also see the entrepreneur’s personal finances suffer. Selling the business can help the entrepreneurs to regain control of their personal finances.

You’ve lost your passion for the business

A business is, in many ways, like a marriage. When the passion is gone, you owe it to yourself and the business to part ways. That way you can move onto a project that challenges you and makes you feel fulfilled and the business can be taken over by someone with the vision to take it in a bold new direction.

This post is contributed by Jason Dirkham