Top 7 Reasons to Sell Your Business
As a business owner, you’re used to making intelligent decisions after careful consideration. And selling your business may be the most important one you’ll make. Here are some reasons to sell your business and make the most out of the opportunity.
1. Retirement
One of the most popular reasons to sell your business is retirement. You may have started a business, run it successfully for many decades, but your children have taken different career paths. Selling your business is one of the best ways to fund your retirement.
Whether you’d like to pay off your mortgage, move to a new location, travel, invest, or purchase a more hands-off type of business, selling your business is one of the best ways to achieve these goals.
Make sure to take your time and plan things correctly, and work with a solid business broker who can get you a good price for the fruit of all of your hard work. Retirement is one of the reasons to sell your business that buyers are most comfortable with.
2. Risk
In some instances, you may be in a line of business where things are rapidly changing and it is difficult to stay on top of these new changes. Or the market has become saturated with competitors. Or the type of work is just not in line with your skill set.
Not every business is for everyone. In this case, holding on to the business may be riskier than selling your business and looking for something in another industry more suited to your skill set, or an opportunity where you can capture more of the market.
Might as well get out while you’re ahead.
3. Interest in a New Business
Sometimes it’s not so much that the business is not inline with our skills as we’ve just lost interest in the type of work, and a new, more interesting, or more lucrative business opportunity presents itself. As opposed to running two businesses at once, and splitting your attention, you can now dedicate your full energy to the growth of your new business venture.
Changing business types is another one of popular reasons to sell your business, and one that is understandable among business buyers.
4. Money / Opportunity – Reasons to Sell Your Business
Selling a business when it is doing well and most valuable can be another one of reasons to sell your business. You’ll get the most for your business when it’s increasing its profits year after year, and buyers are usually willing to pay a price above market value if they feel the business has the potential to keep growing.
Some business owners have a “flipper” mentality, and know they can sell a business when it’s doing well, and get into something else with full confidence – rinse, repeat. Others may worry about the ability to sustain such a high level of performance, and feel they should sell when the market conditions are right and an attractive offer is presented. When the economy is doing great and you’re in a buyers’ market, you could be offered purchase prices that are hard to turn down.
In other scenarios, you may have a strategic buyer who is looking to acquire your business because it would be an excellent addition to their business model. Strategic buyers are generally willing to pay a premium.
5. Health Issues
We’re all human, and unfortunately, most of us face health issues throughout our lives at some point in time. For work that requires constant activity and/or a high energy level, certain health conditions can affect your productivity.
Selling your business because you are no longer physically able to run it is a reason to sell a business that is more common than you may believe.
6. Poor Business Performance
On the other hand, just as some businesses may be doing great, others may not be in the best condition. This can happen for any number of reasons – often out of the hands of the owner. For instance, there may be an economic downturn that some businesses can ride out, while others can’t or simply don’t want to.
These unwanted circumstances, while frustrating and disheartening, can be a reason to sell your business. You may not be able to sell for much of a profit, if any, but at least you’ll be able to walk away with money for your personal expenses or which can be used to enter another business venture.
Business buyers are often interested in failing businesses because they can find opportunities in industries they are interested in, and at a bargain price. You may also get lucky and find a strategic buyer who sees opportunity in your business, and who will be willing to may more than someone looking for a deal.
7. Changing Business Landscapes
New industry regulations or legislation can be a deathblow to certain businesses, or make operating them extremely difficult. Economic downturn, low employment rates, or worldwide unexpected situations such as trade wars or pandemics can lead to difficulties in your business and/or industry.
If you can find a buyer, you may consider selling at this time.
Looking to Sell Your Business?
If looking to sell a business for any reason, you will want a business broker to help you along with the process. A business broker will help you figure out the value of your business, properly market the opportunity, and help you maintain confidentiality throughout the process.
Capital Business Solutions’ team of highly-experienced and credentialed Business Intermediaries and M&A Advisors can help guide the way. Contact us here!