Do you dream of selling your business one day?
Just a short time ago, one of the stars of the ABC show Shark Tank, Robert Herjavec, was considering the sale of his international company. Before making his decision, he spent some time talking to one of the other sharks from the show, Mark Cuban and asked what he thought. The advice that he received helped to shape his decision. In a conference with over a thousand young entrepreneurs in Florida, Herjavec shared his experience and gave advice on the timing of a business sale. If you’re wondering whether it might be time to sell your business, consider these three things Herjavec recommended:
The First Question to Consider: Will the proceeds of the sale have the potential to change your life?
When Herjavec sold his very first company in the tech space, BRAK Systems, to one of the AT&T branches in early 2000, he was able to get more than $30 million in the deal. Although he had started and nurtured the company from the ground up, he realized that the sale would have the potential to change his life by giving his family a kind of financial security that is hard to come by. This helped him to make the decision that it was the right time to sell that particular company. When considering whether it is time to sell your business, think about whether doing may have a great impact on your financial future.
The Second Question to Consider: Do you truly think it is possible to continue to grow and receive further value within your business?
Herjavec argues that there are two things to consider when thinking about the future and whether it is time to sell your business: Whether the market is in decline and whether you continue to be internally motivated by your venture. If the market doesn’t recover, it may be time to sell. Likewise, even if the market is doing well, if you do not have a passion for your business, it might be the right time to sell.
A Third Consideration: No matter what you do, realize that it will have a price.
The difference between a hobby and a business is profit. The only way to gain from a business is to have equity in it. When considering the sale of his own business, Herjavec weighed the profit he could achieve from the immediate sale of his company and realized that there was a good chance that he would be able to make a higher profit by holding on to his business for a while longer. With the company thriving, the market doing well, and no foreseeable changes in the market to make a difference in those factors, he decided that his passion for the company was strong enough to continue to lead the company.
Closing his time with the entrepreneurs, Herjavec reminisced about his own time attending conferences like the one that he now addressed and reflected on his decision not to sell his business, saying, “I love what I’m doing, and I decided to keep going.”