Selling a business is a major decision!
People sell their businesses all the time. Owning a business is often romanticised to the public!
You get to work for yourself, no boss controls your actions, and the potential to earn is usually connected to your work ethic and business model.
While we’re all for owning a business, we usually see people selling their businesses for several reasons. Below are some of the most common reasons people sell their businesses.
But, what about selling your business?
After all these years of hard work, strategic planning, and countless hours of dedication, you suddenly decide to sell everything! But what drives business owners to take such a significant step?
Every single business owner has their unique journey! However, there are some common factors that can prompt the decision to sell your entire business.
So, yes! In this blog, I am going to talk about all the common reasons business owners sell their businesses in today’s business landscape!
The Top 8 Reasons Business Owners Sell Their Business
Why would you sell your business? What are the factors that work as motivational factors?
Let’s take a look at these top 10 reasons that can influence the business owners to sell their business, read on…
1. The desire to retire
While many business owners may not want to admit it, we’re all going to retire eventually, whether that’s when you’re 50 or 70, depending on your success and preference.
Retirement is something to look forward to, especially if you’ve set yourself up well enough financially to look after yourself. One of the most common reasons business owners sell is to retire.
2. Relocating
Another reason we see business owners sell is if they are relocating and cannot manage their business from their new area.
For instance, an electrician moves from Adelaide to Perth. Because their business is service-based, trying to manage it from Adelaide might be unrealistic.
There is the option of hiring a manager if the company is big enough, and running it remotely.
However, this isn’t possible for some businesses, especially if you need capital to set yourself up in the new area you’re staying in.
3. The business is performing poorly.
Did you know that statistically, almost 90% of businesses fail within the first 10 years of existence.
There are a few reasons for this, but one is that the business is performing so poorly that it becomes unsustainable for the owner.
Owning a business that is underperforming is never fun. You feel like all your attempts to grow and succeed are done in vain, and you consistently lose money by investing in the business without gaining any real traction.
Usually, business owners would suffer through this for a while until they financially, mentally, or even physically can’t take it anymore, so they sell.
4. The owner would prefer to work in another capacity
There’s a difference in opinion here. Some people love the idea of owning a business, being their own boss, and having their earning potential uncapped to a degree.
At the same time, others prefer to work for another company because it offers more financial security and might be less stressful.
We’ve often seen people sell their businesses because they got a more lucrative job offer from a company in a similar industry.
Another benefit of doing this for some is that it comes with more perks, too, like sick leave, annual leave, superannuation, and more.
5. The owner sees that the market is right to sell and wants to capitalise on this.
Sometimes, business owners simply wait for the market to be right to sell. We’ve noticed situations where a business has gotten to the point where it needs to raise large amounts of capital to continue producing its products.
However, selling would be the wiser choice because of the market conditions. Wise business owners who have reached a bottleneck in their industry might sell when the market is good and reinvest that money into a new venture.
6. The owner is running multiple businesses.
Entrepreneurs who own multiple businesses might hit a patch where one takes off while the other struggles.
Again, it’s a matter of time. You may not have the time to keep the momentum going in one business venture while running another.
Instead, the option is to sell the underperforming one and reinvest that money into the booming business.
7. Looking For A Good Change
Some business owners prefer to sell their companies when they decide to make a transition from their day-to-day activities.
This can be a significant lifestyle shift; for example, you may have a child or may be going through a divorce.
Once you decide to switch it up! You start to find a buyer for your company—that’d be the best move.
8. Death Of The Business Owner
If the owner dies, selling the company would be the best thing to do! Yes! Ofcourse, you cannot predict this and plan it out for the long term!
As for the transaction, it may seem a little difficult as the owner is no longer there! So, you need to find an experienced broker for yourself who can easily understand the process and make it easier for you to deal with it.
Hire a broker to help you sell your business.
If the market is right and you are in a favourable position to sell your business, it may be the right move for you. Your first step here should be to hire a broker who can help you sell your business.
If you haven’t found a broker yet, we recommend Lloyd’s business brokers. Lloyds have years of experience with multiple industries and can help you get the right price for your business to maximise your return on investment.
Your Legal Guide: Sell Your Business In A Hustle-Free Way!
There are multiple reasons business owners sell their business. In the end, you need to make sure if selling your business is the right move for you!
You must decide whether to get out of financial trouble or put yourself in a better financial position to grow. Make sure that you carefully consider your reasons for selling!
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