Thinking of Quitting your Business? Read This First
Remember back in the early days of your business, when you could envision yourself steadily growing your business?
In this vision you poured your heart and soul into your business and you were rewarded with your business loving you back – giving you more time with your family, creating financial stability, and providing a place you loved to be during the workday.
How does that compare to your current reality? Is the contrast a between fantasy and reality too painful to look at, or is your business working for you?
I get it. I’ve been there. The days when all I wanted to do was curl up in a ball and cry? Asking myself “why do you put yourself through this”?
Here’s the deal. I’m not going to sit here and tell you not to quit.
Truth is, quitting might be what’s best for you and your family. But before you do… consider your options.
In order to fully grasp what it would mean to quit, ask yourself what it would mean to wind down the business.
– What bills would have to be paid,
– How would your daily life change
– What would you do instead?
Look at this decision using the 10/10/10 rule – what would my life look like 10 minutes from now, 10 days from now, and 10 months from now?
If in 10 months you see yourself as happier, and relaxed, this may be the right option.
There are certain scenarios where quitting truly is the best option. If a business has been bleeding cash with no ideas as to how to turn around the ship, or if you’ve genuinely gown to resent your business, it’s time to let it go.
Some businesses outlive their usefulness and die slowly and painfully. The longer it’s dragged out, the more damage is done to your health, wealth, and spirit.
Are you a better person because of your business? Is there any way to turn the ship around?
And most importantly: What is the “kill” criteria? How much more are you willing to sink into your business before you let it go?
Preparing a business for a sale is (for me) really exciting. Think of when you prepare your house for sale. All those projects you wanted done for YEARS now have a priority and actually get done.
In fact, by the time your house is ready for the market, you love it more than you ever have because the bathroom is updated and every nook and cranny is pristine.
Selling a business is the same thing. You want your business to put its best foot forward. You want to set up the next owner for success. And in doing so, you get a laser-focus on
and you may end up falling in love with your business and keeping it anyway.
Preparing your business for sale – whether you intend to actually sell it or not – is a kick in the pants. You see your business from the perspective of an outsider. With this fresh perspective you get ideas as to how to improve, what changes need to be implemented right now.
In fact, you can just skip options 1 & 3 because this strategy will pump lifeblood into your business and give you perspective on what you really want for your business, whether you’re looking to get out or not.
How to prepare a business for sale:
(This is where I get that stupid Barney “Cleanup!” song stuck in my head.)
1. The books – financials need to be pristine. Get all the missing vendor invoices in there, get the balance sheet accounts reconciled, and then (my favorite part comes next)
Go through the detailed expenses on the income statement. Be sure you have a paper copy because this is going to get fun!
Put a line through any expense that you didn’t need. And when I say “need” – ask yourself if the expense truly contributes to the bottom line.
2. Get all your “Shoulds” and “To Dos” out on paper. All of ‘em. I know they’re hiding on sticky notes, backs of envelopes, and 3 different half-full notebooks that all serve the same purpose. Get them all in one place.
Prioritize which are legitimate. Which of these can have the most impact with the least amount of work?
Implement those or create a plan for the “Buyer” (which is potentially you) to have fast, measurable successes right out of the gate.
3. Document your processes. And if you don’t have any – no wonder your business is driving you nuts!
The goal here is to find more opportunities for improvement. It will force you to answer the question “why do we do this like this?”
4. Get a valuation.
Trust me on this. Don’t get a valuation before you do #1-#3 because in doing the legwork, you will make brokers more eager to talk to you and raise your valuation if you have ideas for supporting the next owner from the get-go.
Changes need to be made if you pick this option. If today you’re curled up in a ball trying not to let your business get the best of you, the status quo isn’t doing you any favors. And you shouldn’t be “surviving” your business, you deserve to be thriving.
Go back to Option 2 and complete steps 1-3, with an important addition: Get a coach or mentor that you can talk to about your ideas and execution. Yes, a good coach is going to cost you, but the ROI will be outstanding.
A coach will help you get clear on your goals, and not just goals like “I’d like to make $100k/year”. They’ll help you dig deeper than that. They will help take action on the things that matter so that you can use your time efficiently and take measurements of your progress.
Think back to that early vision of your company. Everything you want for yourself and your business is attainable if you are clear on your goals and take consistent action.