When it’s time for your business to change
- Small businesses can born and die at any moment. Depending to their leader, it will be how the company will transform over time. While they have to strain to grow, at some point they will have to decide on which changes in small business will come.
Decisions to expand, sell or close the business will appear due to various circumstances that surround the company. Starting a business is not easy, keep it even less. That’s why entrepreneurs must recognize what is the best decision, although it seems the hardest.
Changes in the small business
To expand a business is important to recognize when it is time. Here are some situations.
- When competitors begin to grow.
- When you have the resources to do so.
- When expansion helps accomplish the vision.
- You have the possibility to delegate some power.
The time to sell a business is also very hard and difficult moment.
- The buyer offers more than what the company will generate in subsequent years
- When you’re ready for retirement.
- You do not want to invest in growth.
- You are tired.
Perhaps, the most difficult time is deciding to close a business.
- When debt is 50% more than the value of assets
- When losses are growing, rather than decreasing.
- When inventory turnover decreases.
- When the renewal of a loan is rejected.
It is difficult to reach those moments. In the case of expansion, it would certainly be one of the most positive, since the ownership of the company is maintained and it will keep growth over time. The sale of the small business can go beyond a monetary transaction, also the time spent in business is a value that will definitely be much more than the economic value. Finally, a decision may have to be taken if it is in red numbers. Closing a business also cause a great impact on the entrepreneur.
Infographic – When it’s time for your business to go big or go home
Source: When to sell small business