It is not unusual for a new business owner to call and say, ‘Way too much, I want out.’ Often the entrepreneur did not fully realize the commitment to time, energy, and resources required by a new business, whether newly purchased or newly opened.
These are three tips for a new business owner:
1) Assess carefully up front not only the purchase price but also the working capital. My practice has a great list of qualified business consultants in specific areas. You can go to the local SCORE or Small Business Development Center, for guidance. You can also find plenty of information online. If you choose one of the two former sources, you might validate through and Internet source. (Working capital is the sum of money you need to keep the business operating through start up, short cash periods, and new investments.)
2) A business purchaser typically will want several years of performance to validate the business performance or pay considerably less for the opportunity. It is best to have a minimum of one year of traceable performance. Finding a way to wait for sale is best.
3) The start to any business ownership can be rocky. Your systems are not necessarily in place. Perhaps you bought the business and haven’t honed your management and sales skills or changed systems of the prior owner and your new, better means have not yet taken effect. Many times, it is better to not make big changes for 6 months to a year. You may find you are relieved by merely tweaking some methods, releasing some responsibilities to others, or otherwise altering your operation. Take these steps before you lose money in a premature sale.
If you can’t wait to sell, then consult with a broker about the best strategy.