Selling a business is an emotional process for many reasons. Accordingly, “seller’s remorse” is often a major reason for transactions to terminate before the deal is done. Nonetheless, there are reasons why selling makes sense or is the best avenue for the business owner.
Burnout is a major reason owners consider selling their businesses. Over time, the long hours and 7-day work weeks can take their toll. On the opposite end, business owners who thrive on challenge may get to the point that the business has just become boring – the challenge of creating it or growing it has been replaced with the mundane daily activities of running it. Losing interest in one’s business usually indicates that it is time to sell.
Lack of succession
Sons and daughters may be disenchanted with the family business by the time it’s their turn to take over. They may have their own dreams to fulfill that do not include the family business.
Unexpected events include such things as accidents, illness of owner or family members, divorce, and partnership issues. Unfortunately, these events are seldom predicted, and too many times, a forced sale does not bring maximum value.
Need to cash out
The need to cash out may be caused by an unexpected circumstance, such as a costly accident or illness. Many company owners have much of their personal net worth invested in their business, and this can present a lack of liquidity. In such situations, an owner in need of additional cash has two options: borrowing against the assets of the business or selling the business.
Successful businesses create competition. There are times when a business owner discovers that the competition has built to the point where it is easier to join it than to fight it.
An “out of the blue” offer
There are times when a business may not even be on the market, but someone or some other company sees an opportunity and makes an unexpected offer. This may be a great time to sell as the owner is likely entering the negotiations from a position of strength.
All of these reasons are valid, and one is justified if they feel the time is right. If you’re ready to sell or think you have an offer on the table, contact Moshe Hazout at Transworld Business Advisors today!