Businesses are bought and sold constantly, but the reasons for selling won’t always be the same. There are numerous valid reasons to sell, but a few stand out. Here are some of the common reasons owners decide to sell.
The Business is Doing Better than Ever
That may sound like an odd reason to sell, but it’s a good one. A successful business that’s on an upward trend is worth more, which means an owner may want to capitalize on the business’s success to achieve a higher ROI. However, when doing so, sellers will need an M&A advisor to help them determine how and when to market the business.
The Owner is Burned Out
In some cases, owners are just tired and need a change. Burnout is one of the most common reasons owners choose to sell. While there are strategies to deal with burnout, they don’t work for every owner. If there is no way to restore interest in running the company, selling is the best option. Again, however, take the time to discuss a potential sale with a broker as soon as possible to prevent burnout from reducing the business’s value.
Retirement is on the Horizon
Owners considering retirement are encouraged to start planning for the sale as far ahead of the anticipated sale time as possible to prepare properly for the transition. That’s especially important when the sale proceeds are needed to fund the owner’s retirement. A broker will work closely with the seller to ensure the business garners as high an ROI as possible. Careful preparation will also include the need for partners like accountants and legal experts to ensure the best outcome.
It’s Time to Relocate
Another reason brokers see business owners sell is their desire to relocate. In this instance, the business isn’t in trouble, but the owner wishes to move to a different part of the country. While operating a business remotely is possible, that option rarely proves practical for average business owners. When the time comes to move on, contacting a business broker for advice is always recommended.
The Business isn’t Profitable
Unfortunately, not all businesses are profitable. That doesn’t mean they don’t have value. The facility itself, as well as equipment and inventory, have value. Many buyers also look for businesses that don’t currently generate significant profits but have the potential to do. These situations require careful handling to prevent unnecessary losses, so take the time to discuss a potential sale with an accountant, attorney, and business broker to determine the best way to move forward.
The Seller has New Interests
Another common reason for selling a business is that the owner wishes to take on new challenges or start another business. Here, business owners may have more flexibility than other sellers may have, but the ground rules are the same. Proper preparation is needed to ensure potential buyers see the advantages of investing in the business.
Selling Takes Time, So Start Planning Now
Selling a business is rarely easy, and numerous steps pose challenges during the process. That means all sellers, regardless of the selling motivation, are encouraged to start planning for the sale as soon as possible. The first step is to contact a business broker for advice and to determine how to proceed with the sale.
