When freelancers start their businesses, they go all in: launching their websites, building their authority, differentiating themselves from competitors, and finding increasingly lucrative clients.
Once business is booming, however, they tend to look for other income sources. That could be info products, revenue-sharing deals, affiliate marketing, and so on.
Some even scale their business by developing procedures and hiring employees.
All of these actions make your freelance business more valuable.
At some point, however, you might get tired of the freelancing game. Or you might decide you want a new challenge, or develop a new interest, that would lead you down a different career path. In this case, you can sell the business you have built.
You’re in an excellent position to do so if you worked hard on growing it over several years.
Selling your business is a complicated process, though. If you're considering it, the first thing to do is weigh the pros and cons for your circumstances.
The pros of selling your freelance business
1. Capital to use on other projects
Some freelancers don’t see freelancing as their end goal. Instead, it could be a bridge between the working world and a larger, more scalable business. Freelancing allows you to build up the capital and skills to launch other projects.
Once you sell your freelance business, you gain a substantial sum of money you can invest into new endeavors — such as launching a startup or starting an LLC as you take entrepreneurship to a whole new level.
You may even pursue diverse career opportunities in education, using your newfound capital to cover your education costs.
2. Asset diversification
We’ve all heard the refrain urging us to diversify our assets. For many freelancers, their business is their most valuable asset.
Per the diversification advice, this can be risky to your overall financial situation — even if you’re able to get steady work.
For example, if you suffer a debilitating injury and can no longer serve your clients, your cash flows dry up.
By selling your business, you can put money into a diverse set of assets, becoming less reliant on any particular income source. If you lose one, you still have others to depend on.
3. Lifestyle and other priorities
Freelancing offers more freedom than a full-time job, but you become even freer if you exit the business and take a lot of cash with you.
Should you bring in enough cash and find a way to sustain it, you can live any lifestyle you want — whether that’s traveling the world, volunteering in your community, spending more time with family, or picking up some new hobbies.
The cons of selling your freelance business
1. Missed growth opportunities
You never know if there’s a hidden growth opportunity you’re missing out on.
Once you sell the business, you no longer get to guide it toward further growth. Your buyer might immediately identify new growth opportunities, successfully take advantage of them, and see huge profits.
Meanwhile, you don’t get any of it (assuming you don’t retain any ownership interest in the business).
2. Loss of cash flow
When you sell your freelance business, you lose that income source.
Sure, you get the big payout from selling it. But if you still need an income stream to survive, you’ll need to invest your proceeds wisely (per the asset diversification pro mentioned earlier).
3. Putting your baby in someone else’s hands
It can be hard to let go of the business you built, even if you’re tired of running it.
Not only will you no longer control any part of it, but if you have employees, you’re putting their livelihoods in someone else’s hands.
Consider how much you care about running your business before selling.
Have you walked through this process and feel like selling is the right move for you? Next week, we'll share a step-by-step guide to selling your freelance business.