Selling your business can be an emotional event. “Seller’s remorse” is one of the major reasons that sales aren’t made and deals don’t close. The business may have been in the family for many generations. The owner may have bought it and turned it around or built it up from nothing but a great idea and a tremendous amount of work. There are times, however, when selling is the best course of action. Here are some of them:
- Burnout – According to industry experts, burnout is a major reason why owners consider selling their business. Long hours and 7-day workweeks can take their toll. Sometimes the challenge is just gone – the business has become boring. Losing interest in one’s business and looking for a new challenge is a sign that it’s time to sell.
- No one in the family to take over – Children can become disenchanted with the family business by the time it’s their turn to take over. Or, they may simply want to move on to their own lives and careers.
- Personal issues – Events such as illness, divorce, and partnership disagreements do occur and many times force the sale of a business. Unfortunately, such events can’t be predicted, and too often a forced sale does not bring the best value. Advanced planning can help avoid an emergency sale.
- Liquidity – Often business owners have much of their personal net worth tied up in their business. This can present a serious lack of liquidity. Other than borrowing against the assets of the business, an owner’s only option is to sell it. After many years of building, it’s time to cash-in.
- Changes in the market – Successful businesses create competition. Sometimes it’s better to join the competition than fight it. A business may be standing still, while larger, more aggressive, better financed competitors are growing and expanding.
- An unsolicited offer “out of the blue” – The business may not even be for sale, but one day the telephone rings and the voice on the other end says, “We would like to buy your business.”
There are many, many other reasons why businesses are sold. The principal consideration is that they should not be placed on the market if the owner or principals are not convinced the time is right.
The absolute best time to sell, however, is when the business is growing and profitable.