Owner’s Common Reasons for Business Sale
Selling a business is never easy and the decision comes after a long and difficult thoughtful process. There could be one or more owner’s common reasons for business sale. However, the decision needs thoughtful consideration, as sometimes the decision to sell is taken in quite some haste, which leads to many depressive feelings of guilt and loss later. The owner needs to assess the situation and really determine whether they are ready to sell their business and prepare themselves emotionally and mentally for it. If they are not ready but have to sell their business, then they need to look at the benefits and the reasons for such a situation, and mentally prepare themselves to accept the situation and look at the bright side.
Assessing the reason for selling your business is a major step towards making the decision to sell it. Some of the owner’s most common reasons for business sale are:
This is one of the most common and devastating reason for selling. When the outgoing becomes more than the incoming, it is a red flag. A lot of owners end up losing their savings, their assets, and even their houses just because they keep investing and covering themselves with more and more debt to revive their business. A careful consideration of the option to sell the business to recover cost when the debt starts to grow uncomfortable is a good idea.
Business ceases to be profitable
Owners make a choice to sell their business because it just stops being profitable. Either the product loses market appeal because of newer and better products or the mode of marketing becomes redundant. This is in fact, a good reason to sell if it is not possible to better it in any way.
Passing it on to heirs
A very common reason for an owner to sell is to pass it on to the heirs. This could be because the current owner cannot take it to the next level, cannot compete with the market anymore, or they just want the new generation to begin managing the business. This is one of the most preferred ways since the business still stays in the family.
New Business venture
Owners sell their company also to generate capital for a new business venture. In fact a lot of small business owners start a particular business to generate enough income to start another business that is their long-term goal.
Owners often lose the excitement of owning a business and this happens when the stress of the business becomes unmanageable for them. This situation leads mostly to impulsive decisions and a great deal of regret later so it is important that the owner be extremely sure that they are bored with their business to an extent that they do not want to manage it anymore, not just because of a one-time event.
A very logical reason to sell is retirement. A lot of people plan their business in a manner to retire by a certain age, and when they reach their milestone, they sell to then move on and enjoy their lives just as they had planned.
ABOUT THE AUTHOR
Alam Qureshi is a Certified Business Intermediary (CBI), Certified M&A Professional and Broker of Record at ProClient Brokers Inc., Brokerage. He helps business owners learn how to sell a business so they can get the maximum value for their company. call us 416 364 5550 or CONTACT US to get in touch.
Date modified: 7-10-2019