Selling one’s business can be a traumatic and emotional event. In fact, “seller’s remorse” is one of the major reasons that deals don’t close. The business may have been in the family for generations. The owner may have built it from scratch or bought it and made it very successful. However, there are times when selling is the best course to take. Here are a few of them.
- Burnout – This is a major reason, according to industry experts, why owners
consider selling their business. The long hours and 7-day workweeks can take
their toll. In other cases, the business may just become boring – the challenge
gone. Losing interest in one’s business usually indicates that it is time
- No one to take over – Sons and daughters can be disenchanted with the family
business by the time it’s their turn to take over. Family members often wish
to move on to their own lives and careers.
- Personal problems – Events such as illness, divorce, and partnership issues
do occur and many times force the sale of a company. Unfortunately, one cannot
predict such events, and too many times, a forced sale does not bring maximum
value. Proper planning and documentation can preclude an emergency sale.
- Cashing-out – Many company owners have much of their personal net worth
invested in their business. This can present a lack of liquidity. Other than
borrowing against the assets of the business, an owner’s only option is to
sell it. They have spent years building, and now it’s time to cash-in.
- Outside pressure – Successful businesses create competition. It may be
building to the point where it is easier to join it, than to fight it. A
business may be standing still, while larger companies are moving in.
- An offer from “out of the blue” – The business may not even be on the market,
but someone or some other company may see an opportunity. An owner answers
the telephone and the voice on the other end says, “We would like to buy
There are obviously many other reasons why businesses are sold. The paramount
issue is that they should not be placed on the market if the owner or principals
are not convinced it’s time. And consider an old saw that says, “The time to
prepare to sell is the day you start or take over the business.