(This is part 7 of a 7-part series on “Warning Signs That it Might be Time to Sell Your Business”)
The business has outgrown you. OK, this is a very humbling situation and most people tend to completely miss this situation, but I see it happen all of the time. An individual creates and starts a business and they are good at what they do. They find themselves in an industry that is taking off and they begin to do very well and they continue to do well over the years and before they realize it the business has outgrown them.
They still know how to operate the business and they are still good at selling, but they only have the ability and education to operate the business at a level that equal to their talents and abilities. Therefore they end up stymieing the true growth of the business. But that isn’t the worst part. The worst part is that the business has gotten more complex than when they started it and they need more sophisticated financial people and financial systems, but they don’t know where to find them or who to turn to for help. At this point the business begins the process of self imploding, because all of their team is generally working with limited capabilities just like themselves.
Their accountants are ones that they have had for years and they are going to continue to do the same things and they can’t help the individual grow, because they have the same problems he does. The same is true for all of the rest of the employees and advisers. So the business begins a slow death if the business isn’t sold or merged with a more sophisticated business to help take this business to the next level.
Beware, this one will sneak up on a business owner and unless the business owner has a strong self esteem they will not recognize it and their ego will keep them in denial and the business will be on the downhill slide. Be sure to be able to stand back and talk to one self and hopefully have someone who can help you recognize that it may be time to sell or merge this business.
If you find yourself in over your head, it might be time to sell your business.