How do you know when to sell your business? How do you close a business?
In his book Anything You Want, Derek Sivers says that as the owner of your own business, you should pay attention to what makes you happy and the passions that fuel you. When you no longer feel passionate about running your business, Sivers says it may be time to walk away.
Keep reading to learn when and how to sell your business, according to Sivers’s advice.
When to Sell Your Business
According to Derek Sivers, once you’ve homed in on what you love, you should keep doing it—even if people tell you that others can do what you’re doing better, faster, and more profitably. He argues that you should measure yourself only against what matters most to you, not what matters most to others because their end goal is not your end goal and it won’t make you happy. However, it’s also important to understand when it’s time to walk away from your business. In this article, we’ll discuss when to sell your business, according to Sivers’s advice from Anything You Want.
In Anything You Want, Sivers recommends that you ignore naysayers and continue to actively develop the skills you need to do the thing you love. Continue until these skills are so ingrained that they become part of who you are: It’s the act of doing that will make you what you want to be.
However, Sivers says that when you no longer have passion for running your business, it’s time to close shop or sell. This is more than having a bad day at the office—when you’ve surpassed your goals for the company, you can’t think of where to take it next (or simply don’t have interest in it), and when you begin routinely fantasizing about getting out, that’s when you know it’s time.
Leaving the company isn’t just for you: When your interest in your company wanes, sticking around only risks doing damage to it. Sivers says that if you care about your company, you’ll make sure that it’s being run by someone who wants the job and will do it with their whole heart.
Lesson illustrated: Sivers says he knew it was time to sell his business, CD Baby, when he’d achieved all his goals, didn’t have a vision for taking the business in a new direction, and was more passionate about projects outside the business than in it. He received two competing bids for the company and chose the lower offer. True to his principles, he chose the person who he felt was a better fit for his customers.
(Shortform note: CD Baby is still alive and well. They retired the retail store in March of 2020 and are now focused on its distribution, monetization, and promotion services for musicians.)
How to Close or Sell Your Business
Sivers recommends shutting down and walking away from your business when it’s fulfilled its purpose and your passion for it wanes, but he doesn’t provide specifics on how to do this. If you decide the time is right to close your business, you can take the following steps:
- If you’re a sole proprietor, you can simply decide to close. If you have partners, you must get an agreement from your co-owners.
- File dissolution documents.
- Cancel registrations, permits, licenses, and business names.
- Make sure you’re in compliance with employment and labor laws.
- Wrap up outstanding financial obligations.
- Hold onto tax, employment, and other legal documents per their specific regulations.
If your business is still fulfilling a genuine customer need but you’ve lost a passion for it, you can make selling your business a more positive experience by taking these three steps:
- Identify a clear sense of direction you want to move in next.
- Compile an exit memo that details every aspect of how your business operates to help the next person taking over the helm.
- Give yourself plenty of lead time before you sell.
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Here's what you'll find in our full Anything You Want summary:
- How to turn your hobby into a successful business
- A non-traditional approach to business ownership
- How to integrate honesty, creativity, and humanity into your business model