Reasons To Sell Your Business
Exploring why you are interested in selling your business. There are eight basic reasons for selling a business. The first three reasons are always acceptable to sellers:
- The Number one acceptable reason is retirement. You have built your business, you are happy with its value, and you have no family members, friends or employees to transition it to.
- The number two acceptable reason is personal matters, such as poor health or divorce.
- The number three acceptable reason is the industry has changed and the company needs someone who can keep up with the changes.
These three reasons give a prospective buyer confidence they too will be able to operate the business as long as their skill set, health and happiness are maintained. However, there are five other common reasons for selling a business that often give buyers pause when buying a business.
- The first reason is boredom or fatigue. This will entice the buyer to think how long before I am bored? Or, is this business too taxing for me?
- The second reason is poor financial performance and/or economic conditions. If things are bad for you, is a buyer really going to be interested in buying your headaches?
- The third reason is either key employees or partners have left or are not cooperating. Again, a buyer will not be interested in purchasing your problems.
- The fourth reason is you want to invest in other projects. If you have better projects to invest in other than this business, that is a strong signal to a buyer that he may have better projects to invest in as well.
- The fifth and final reason is you have another buyer who has expressed interest in purchasing the business. Most buyers will question why the business did not sell to that buyer. Are your terms unreasonable? Are you really motivated to sell?
There you have it. Buyers will be wary of wasting their time with any of these five scenarios.
Irrespective of your reason for selling your business, the best time to sell your business is when it is still growing and making good money. However, it is important to think about why you want to sell your business and how to communicate your reasons for selling to a buyer, to assure them the business is sound and you are motivated to sell.
So, let me cover the three acceptable reasons for selling your business, one more time. They are:
- Personal matters such as health or divorce
- And, finally, the industry has changed and you have the wrong skill set to take the business to the next level.
Again. On behalf of Florida Business Exchange, I would like to thank you for listening. If you have any questions regarding preparing your business for sale, please do not hesitate to contact your Florida Business Exchange intermediary for a complimentary consultation. I wish you the best of luck in pursuing your after sale dreams, and having our team of professionals helping you through the process.