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Letting go of your business isn’t always easy, but there’s still a base level of comfort you want to have going into the decision. After all, you built this, and you want to make sure you’re making the best choice you can for yourself and your business—not to mention the other ventures you want to spend time pursuing.
We asked Nicholas Montgomery, Growth Lead for Exchange Marketplace, powered by Shopify, to weigh in on your question. The very first thing he said was that the most important factor in moving on from a business is always going to be personal.
What’s your “why”?
There are as many reasons to sell a business as there are business owners.
“If you’re thinking about selling your business (or, for that matter, buying a business) there are any number of reasons you might be considering the decision,” said Nicholas.
“One merchant’s grandfather passed away, so he wanted to sell his business and take time off to travel across the country. He was disconnecting from all internet for 6 months, so he was selling his store. Another person had a child, so that was their new focus.”
First and foremost, step back to examine what made you consider selling your store. It’s a great way to evaluate your options, and find some peace with either choice, selling or not. More personal factors may lead to a much easier decision, but if that’s not the case for you, all is not lost.
Where is your business?
Even if you don’t have a major life event prompting your thoughts of selling, understanding where you’re hoping a sale can take your business is another great way to evaluate the pros and cons.
“Depending on what’s motivating you to sell, it can guide what you look for in a buyer, and help you get more comfortable throughout the process. As an example, if you’re selling because you’ve lost interest, but you have a strong brand, it’s in your buyer’s best interest to maintain that brand. You’d want to ask them about their plans to build and strengthen the brand before you sold, to make sure they’re a good fit.”
If that’s not the case, or your business is at a place where your brand wouldn’t be considered a strong asset, you’re right to be a bit concerned—and much more cautious—about how a buyer will handle it.
“If you're selling a business that has a lot of excess inventory a buyer would liquidate, and you're just trying to get it out the door, your brand isn’t going to be as important for the buyer. In that case, you should be a lot more cautious, especially if the brand has always been tied to you personally.”
To vet potential buyers, it’s considered quite normal and accepted to have conversations about their plans for the business, and why they’re interested in the opportunity. Nicholas shared two key questions you can ask when interacting with potential buyers.
- What are your motivations for buying this business?
- How do you plan to grow it?
Those two questions can not only help you assess whether the person is a good fit to take over your store, but they can also bring up important information the buyer should know. Nicholas shared an example about a buyer who was interested in growing the business internationally, and the seller had tried it previously and ran into several roadblocks. That type of exchange can be very valuable for both parties, and save both a lot of time.
How will you transition?
When you’re selling your store, there are many ways you can ensure a smooth transition of ownership, and the first step is simply planning it.
“When you sell your store on Exchange, we have a checkbox where people can say ‘I'm willing to do training with the new buyer, pass them down to the business and maybe write some guides about how we do different processes.’ Many people are interested in that and want to do it to ensure it's a successful sale.”
It all goes back to why you’re selling and your goals, but if you’re worried about potential mishaps that could arise from a mishandled transition, you can put together an overview of exactly how you’d like to manage the process. That information not only gives you peace of mind that a new buyer will have all the knowledge they need to succeed, it’s also going to be very attractive to potential buyers.
What can I do to make myself more sure?
If you’re still on the fence about selling, hard data might be the best way to make up your mind once and for all. If it doesn’t, an additional data point can still help tilt your thinking one way or the other. Luckily, as a Shopify store owner you can get exactly that in the form of an estimated valuation.
“You can install the Exchange App to get an estimate of your store’s value without having to list your store. Some people get the evaluation but haven't decided to list yet, or they’re just curious as a business owner about the rough estimate of the value of your store,” says Nicholas.
“A good percentage of store owners will just install the app but not actually sell, but we also see that they might come back in a few months and be ready to sell. Often, they’ll use the time to get their business ready for sale, or to wrap up ongoing projects.”
Address the FOMO head-on
The elephant in the room is, of course, what if you sell too soon, and your business takes off after you’ve left it?
“One of the big concerns is, ‘What if I sell it and it becomes this huge monster that used to be mine?’” says Nicholas. But he wants everyone to remember that selling might be the only reason for that big surge in growth.
“Running a business is about the entrepreneur—the person who is actually running the business. So, if you've found that you aren’t growing the business, or you’re not the best fit for it, that's fine. But don't assume that if someone else came in and started running it, that their success would have also happened for you in the same way. Entrepreneurship is about deliberate actions and the choices you make.”
"Entrepreneurship is about deliberate actions and the choices you make.”
Maybe the person you sold it to had existing connections in that niche, or they came in with a different set of skills. At the same time, your skills, connections, and experience could be much better suited to the new ventures you’re considering, and those new ventures might take off even more than your original business.
The same applies if the business goes in a direction you weren’t expecting, or the new owner takes actions you don’t agree with. There’s an element of letting go that’s required in any sale, so whether the business is a massive success or starts to decline after the sale, you need to make peace that the outcomes aren’t yours anymore before you decide to sell.
So what should you do?
Whether to sell your business is never going to be something anyone else can answer for you. But while it comes with the same concerns as any major decision, there are a few things to remember that can ease the process.
You can only make the best decision for yourself with the information that you have.
You can only make the best decision for yourself with the information that you have. Even if that means you need to say goodbye to the future potential of this one venture, you just need to be confident that the time, money, and skills you free up by selling are put to a use you feel good about.
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