Did you know there are around 10,000 businesses sold each year in the US? The digital economy and the impact of the global pandemic have shifted the nature of business and commerce on their heads. So could this be the right time for you to get out?
There are a number of reasons people may decide to put their company on the market. Read on as we discuss nine reasons you may sell a business.
What is the point of building up a profitable business, if not to reap the rewards in your twilight years relaxing on the profit? For many people, retirement is the carrot on the stick. It is often one of the main reasons companies are sold.
In many instances, companies are passed down to children and other family members. However, they may not always have the desire or skills to keep the business going. In this instance, selling is the best option.
If you are selling a business, you need to decide how you will transition to retirement. Will you sell up and finish working immediately, or will you take positions in other firms to ease yourself into it?
Burnout is when a person has put lots of time and effort into a business or occupation, then begins to realize it has tired them out. It can happen overnight, or it can gradually creep up on people. They may want to move to a different company or change their industry altogether.
Sometimes, this can be tied to a decline in profit for the company. This requires even more hard work, which makes the owner feel more burnt out. It is a vicious circle, and often selling the business is the best way to combat it.
3. New Ventures
Business always presents new opportunities. If you are entrepreneurially-minded, then you may have spotted a chance you just can not turn down. In this instance, you either hire someone to do your job and go on your new venture or sell up.
It may be that selling a company is your only option, as you may need the funding. Sometimes it can be to mask burnout or even boredom. However, in this case, finding a new business is still the best idea.
You may ask “Why sell a business that is growing?” If profits are up and the company is doing well, then it must be a good thing. It is, and it is something that others will take notice of.
This makes your business extremely saleable. It may be noticed by competitors or larger companies wanting to branch out into your niche. A profitable company that is ripe for growth is a great investment, and people will pay a higher price for one.
Any company will have periods of growth and periods of stagnation. They may eventually even start to decline in profit. If you are at a peak, it may be worth considering selling up now.
5. Health Problems
Running a successful business is tough on both the body and mind. Health problems can catch up with you at any time, particularly if you decide to work into retirement age. If your job is extremely stressful, then you need to step back.
You can gradually begin to retire from the business and let someone else take over. However, many people prefer to sell outright and use the money to live comfortably.
6. Declining Revenues
There are always periods of growth and decline in a business. However, if some people have been in the business for a long time they may be ready to leave or retire. Others may have seen that the business is naturally headed for a long-term revenue loss, and want to sell.
Revenue falls for many reasons, and sometimes it is beyond the control of those running the company. Customer needs shift, laws can change or products can just decline in popularity. While these changes always bring about new companies and produce winners, small businesses and even larger ones can feel the pinch.
7. Bad Locations
The location can wreak havoc on a business, and very often the change is beyond the owner’s control. It can impact small businesses more, who have had physical premises in one area for a long period of time. The economic status of the area may change, crime could have gone up, or large chain competitors could have moved into the area that they can not compete with.
There are only two options, relocate or sell. For many people, a relocation means losing lots of local customers and could be like starting over again.
8. A Great Offer
If you are very lucky, you may not have even thought of selling a business until approached. Perhaps it is a competitor trying to buy you out, or someone who just loves what you are doing and sees the potential.
As these offers are usually out of the blue, the person knows you are not even considering selling. This should mean the offer is way above market value. You could even use their desire to push it a little higher.
9. Family Commitments
Family can play a huge part in your business decisions. You may decide the business is taking up too much time, and you are missing out on your children growing up. Perhaps you were single and just met someone, or have a relative that needs caring for.
In these situations, it is better to sell up. Trying to split your time between the two can mean declining sales, which will result in less profit when you do sell.
Sell a Business Using a Broker
Now you know why you would sell a business, you need to decide if you are ready to do it. The first step is always to arrange your finances, papers and contact a broker. This way, you will get a much better deal and a higher price for your company.
Your first stop should be Visionary. We offer a first-rate business brokerage along with development and franchise consulting. Contact us to discuss your needs, and we could be getting the best price for your business sooner than you think!