When It’s Time to Sell Your Business (Reasons To Sell Your Business)

When It’s Time to Sell Your Business (Reasons To Sell Your Business)

There are a lot of reasons why business owners decide to put their business on sale, ranging from poor revenues to a need to explore new ventures or simple lifestyle changes or retirement.

According to Cress V. Diglio, a business broker from Orlando, one of the first things a prospective buyer asks when planning to buy a business is why the business is being sold. Quite understandably, buyers want to know what they’re getting themselves into and whether acquiring the company is a good idea.

Not every seller reveals the real reasons for selling their business, but this doesn’t necessarily mean that there is an ulterior motive to concealing their motivation.  Perhaps, the seller is just afraid that the potential buyer might back out if they learn that economy has affected their operations or that it has burned them out. Others simply don’t want to let down their egos. Still, there are some who have overriding reasons that ultimately push them to decide into selling off their business.

Top Reasons to Sell Your Business

There are many signs that tell a business owner that it’s time to sell their business. Below we list down the most common reasons for business sale. Which one is yours?

Burn-out

Stress and burnout are among the top reasons why business owners decide to sell their business. Sometimes, sellers just no longer find the same level of satisfaction as before. Feelings of discouragement and lack of motivation can be difficult to overcome. When these emotions creep in, you might have to consider selling off your business.

Better opportunities

When new and better opportunities appear on the horizon, some business owners decide to sell their current business to focus on the new venture. However, this may not always be the case. Other sellers simply use this as an excuse or to mask other underlying reasons for the sale, such as burnout, poor performance, relocation, etc.

Poor revenues and performance

Declining numbers and poor performance due to uncontrollable factors can be a reason for putting a business on sale. Some owners consider selling a good exit strategy as they can still recoup some of their capital.

Unfavorable market conditions

Impending changes in the market that are unfavorable to a business can force some business owners to abandon ship. Although sellers are called to disclose all information, buyers need to be critical about what they are getting themselves into. Failure to investigate and study the business background and its future prospects can be a costly mistake.

Partner disputes

Although disagreements and bickering are not uncommon in partnerships, unresolved disputes can cause partners to part ways, divest, and sell the business. This presents a good opportunity for buyers especially if the company is in good standing.

Financial difficulties

Even if a business has good revenues, owners can sometimes make bad decisions that can turn into major financial burdens. Over time, these losses can hurt the business’ budget and its operations. Selling the business can be a way to solve financial burdens, such as debt or claims. Many business owners consider liquidating their business as a better alternative to filing for bankruptcy.

Lifestyle change

The life of an entrepreneur or businessman is both exciting and exhausting. Some business owners just want to lie low or simply take on a different track. The need for a change in lifestyle is also a common reason for selling a business.

Capitalization

After years of growing a company, perhaps you believe that it’s now time to actualize its full value and pull out your capital. Usually, business owners sell their business if there are favorable economic conditions and there are buyers willing to take your business at the price you’re asking.

Retirement

Entrepreneurs over age 50 comprise more than half of America’s privately-held businesses. It’s really not surprising why retirement is among the top reasons for a business sale. Usually, selling the business before retirement gives sellers plenty of time to make an adequate exit strategy or gain the maximum sale value of the company.

Poor health

A lot of small businesses are dependent on their owners. Usually, the owner runs the whole show. So, if the owner falls ill, the business suffers. Immediately getting the business on the market through a business broker can help you get its best value.

 

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