When you own your own business, there are a great number of demands on your time and responsibilities that fall specifically to you. It’s easy to get caught up in a cycle where one project bleeds into the next project, and there’s no time to take care of business planning. It may get put off, with the thought that you’ll think about it when you get closer to retirement age.
Your lack of planning can be disastrous in the event that the unexpected happens, such as a major health problem, steep economic downturn, rapidly slowing sales or a family crisis that requires your full attention. These are all potential scenarios in which, with no contingency in place, your company is unable to move forward.
In this case, the only options may be closing down or trying to sell the business. Particularly if the company is not turning a profit, should you close your business or should you sell your business, despite dismal financial projections?
Your personal situation matters
You have single-handedly built from the ground up, and it is difficult to imagine how your company could be sustained without your knowledge, experience and dedication. Like every one of us, however, the possibility exists that you could be struck down by a devastating illness or even an unexpected death.
Your loved ones would be left in the very difficult position of either selling or closing the business in your absence. Family may assume the company has no monetary worth without your expertise and opt to simply close its doors, but this would be a mistake.
Even if the business is not currently turning a profit, there is still value in items like office equipment, proprietary software, client lists and inventory. There may also be more of a market than they realize for the company itself. Professionals who specialize in turning around underperforming businesses and competitors are just two of the potential buyer pools to investigate.
Get professional advice
When it’s time to sell your business, consider contacting a business broker. They will detail the losses you may incur should you close your business instead of looking for a buyer. A broker can also provide an estimate of the value of the existing business and facilitate the marketing and purchase process. Another resource is a business crisis management consultant.
Being prepared is key. When working with your business consultant be sure to create a thorough crisis response plan that outlines the steps that need to be taken at the time of an adverse event to best protect your business. Once that is accomplished then the transition to mitigating the crisis and moving into the recovery process becomes much smoother and cohesive.