reasons to sell a business

Reasons to sell a business

The professional life of a business owner is made up of different stages that are constantly being overcome. The question is: which is the last stage that the business owner should reach? Usually, this happens when the following conditions come together:

  • Having reached professional and economic success.
  • Being relatively close to retirement.
  • Feeling dissatisfied and unhappy towards your business or work.

When these patterns come together, we are clearly in front of a situation that requires a change in the focus of life. This means that probably the original purpose from which the company was created has already being achieved, and hence its value has been lost. This is when the moment of considering a new life purpose, that goes in accordance with the current situation of the businessman, arrives. At this point, many reasons to sell a business may start to appear in the mind of a business owner.

ideal buyer for my business

Two main reasons to sell a business

Working in our sector, we have witnessed wonderful stories of different business owners that have explained to us the main motives why they were selling their company. Usually, there are two types of reasons, economic and personal. Maybe you can relate to some of them. Let’s take a look:

Economic reasons:

  • A new competitor: We have seen many cases in which, within a sector, big corporations were acquired by strong venture capital institutions. This may be a scary trend for business owners that compete against such organizations, since they have less resources to stay in line. Therefore, this situation gives them a good reason to sell their business.
  • Decreasing profitability: This is always a strong sign for selling a business. In some cases, we have witnessed that the aggressive competition in the industry threatens companies that are not well structured internally. Therefore, they become less profitable with time. Don’t let his happen and read the signs, you might still be on time.
  • Need of capital injection: We live in extremely fast advancing times. For some businesses, it’s hard to adapt to the evolution of the industries, since this requires a huge investment. Competition may evolve faster and put your business in danger. The need of capital is a good reason to consider selling your business.

Personal reasons:

  • Retirement: This is one of the most common reasons for a business owner to sell their company. Many owners have gone through a long path to build their company from scratch. It is hence normal for a business owner that has reached professional maturity, to feel tired and in desire of some peace and quiet at last.
  • Change of lifestyle: This motive goes in hand with retirement. Business owners usually seek fulfillment in other aspects of life once they reach professional maturity. Some want to dedicate themselves to giving back to society, others want to spend time with their family, and others simply want to enjoy the perks of a good life.
  • Health Conditions: Owning a business is extremely stressful and requires the person to be in an optimal state of health. Sometimes, nature denies this privilege and selling the business may be the best option to avoid losing all the effort and investment of a lifetime.

These are some of the main reasons to sell a business, but the important question is: how would the business owner feel after the sale?

The after-taste

After selling the business, many business owners stop experiencing the sensation of dissatisfaction and unhappiness. They are able to make a decision that allows them to confront a new professional challenge. Moreover, they can choose to do something that contributes to society and their loved ones.

Despite this, many business owners fear to finish their professional stage. It is common that they have uncertainty about what might happen after the sale. However, once the company has been sold, the businessman enters a new phase in his life full of freedom. Now that they have complete control of their time and resources, they can focus on their life, new objectives, and even dreams.

Moreover, the predominant sensation is of pride and satisfaction thanks to a good company valuation and a successful sale. The business owner sees how the efforts and hard work are recognized and will continue to deliver results for many years to come.

Having said that, if you need further information about the selling process of a company, we put at your disposal our team of highly qualified advisors. When there are more than a few reasons to sell a business it’s time to ask yourself “the” question.

m&a advisors

Leave a Reply

Your email address will not be published. Required fields are marked *