Owing a business carries along emotional engagement as we put in our families, finances, lots of efforts – blood, sweat and tears into our most valuable assets. For entrepreneurs, selling the business can not only be an emotional but also a physically demanding situation. The reason the owners ponder over to sell their business is not always a financial trouble or desperation, but most of the entrepreneurs are looking to get the better opportunities.
There’s an array of reasons why people choose to sell their business. No matter what the reason is, it is important that the business is appraised on the professional levels by the valuation firms so that your business is sold at the best price, under fair terms and in your best interests. So, let’s discuss some of the most common reasons why businesses are sold in today’s market place:
Health Issues: This is the #1 reason businesses get put up for sale. Nobody plans to get sick, but the businesses that are highly reliant on the owner would not be able to survive anymore if the owner suffers health scare. Serious illness such as poor mental health or other diseases that need intensive care of the business owner may lead to the sale of the business. In order to save the business from plunging into losses, it is very crucial to take the necessary steps as the circumstances occur.
Declining Revenues: There is no fun in continuing a struggling business. Every business has its limit where it can persist and before getting to the worse situation, often business owners decide to sell their business. The reason for the declining businesses are beyond the owner’s control and these type of circumstances may also let the owner completely drained out with frustration and hyper tension. Moreover, selling even a struggling business would provide the owner with some sort of support.
Increasing Competition: Today’s market place has a very strong impact on the entrepreneurs and the Internet has exploded, leading a significant competition in most of the business sectors. The businesses running for over twenty years may proactively innovate their business operations and invest more time, money and resources in order to beat the competition or they’ll have to choose an alternative: Sell. Although this would be a monumental decision for an owner, but selling a business while it is competitive may get you higher sell prices and a losing company will give less than the desired price.
New Opportunities: Facing new challenges and setting up new business goals is common for entrepreneurial people. After dedicating 20 to 25 years of time, energy and resources in developing a business, founders may seek a new opportunity or motivation to go with the changing times. Why not, a good entrepreneur is the one, who always moves forward with the ever-changing technologies and business challenges. Selling the current business and investing in the business having more scope is one of the reasons why business-savvy people tend to sell their businesses.
Retirement: Retirement is a common reason for selling out businesses. If the business owner is on the retiring terms and has no one to take over the business, probably he or she will seek a new owner. These businesses would have well-established clientele and will be at it’s peak profitability and the owner would get a fair amount of prices to enjoy the after retiring golden years in peace.
Final Piece Of Advice: Whatever the reason, there are certain things to keep in mind before thinking to sell your business:
Look out for the right potential buyers
Time matters the most
Get your business ready for selling with a good executive team, latest technology and audited financial documents.
Plan out the new projects and the proper time to get the maximum value and exit from the current business.
Sell your business on your terms rather than the market’s terms.