Why Sell Your Company?

Selling one’s business can be a traumatic and emotional event. In fact, “seller’s remorse” is something a lot of business owners experience. 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 many times when selling a business is the best course to take. Here are a few of them.
 Burnout – This is a major reason, according to industry experts, why business owners consider selling their business. The commitment needed can take its toll over the years.
 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. It is also common for family members to not have the skills or determination it takes to operate a business. More and more business owners come to realize they are better off selling the business to a third buyer and invest their proceeds.
 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 your company.” It is important to consultant with an expert to assure the value is correct and to manage the selling process.
 Growth beyond the owner’s capabilities – Many business owners grow their business to a level where it become too much to manage. As the business grows to a higher level, the owner may not have the expertise to manager a larger business with more employees and more compliance issues.
There are obviously many other reasons why businesses are sold. The paramount issue is that business owners should keep a close eye on the business, especially its cash flow and make the right decision to protect the equity in the business. And consider an old law that says, “The time to prepare to sell is the day you start or take over the business.”