Selling your company can be a life-changing decision. It can also be traumatic and emotional event. This is because you’ve put your time, energy and money in building it so it’s not going to be an easy decision. In fact, one of the major reasons why most business deals don’t close is “seller remorse.” The business you want to exit now may have been in your family for generations. You may have built it from scratch or acquired it and made it hugely successful. Whatever the story behind your company, selling your company can be traumatic and emotional. However, there are times when it is in your best interest to sell it. Let’s have a look at some of the reasons why you would want to sell your business.
Burnout – You’ve Reached your Potential
One of the major reasons why most business owners want to exit is that they have reached their full potential. The long working hours and 7 day workweeks push the owners into a burnout phase. In other cases, most owners get bored with the business. They no longer have the same energy or their business is no longer challenging. If you are also losing interest in your business, it might be the right time to sell it.
No One to Take Over
Another reason why you might want to sell your company is that your children don’t want to get involved in the family business. Your children can be disenchanted with the business that you have built by the time it’s their turn to run it. This is a common problem because younger generation wants to make their own name and doesn’t want to take over family business.
Many life events, such as divorce, illness and partnership issues can force the owner to sell their company. These life events are inevitable and can leave a negative impact on the owner’s ability to run their company. It is important to note that a forced sale does not bring maximum value. That’s why you have to be prepared for every situation.
Some business owners want to sell their company under outside pressure. In other words, successful business creates tough competition. This competition may be building to a point where it becomes more beneficial and easier to merge, than to fight it. Tough competition can hurt your business, especially if you own a small company and you are competing with larger companies.
Many business owners have much of their personal net worth invested in the business they own. This can be unfavorable for the company because it can present lack of liquidity. In this case, owner has only two options to borrow money. They can borrow against the assets or they can sell it. So, they choose to sell. This is because they have spent many years building their company, and now it’s time to cash-in.
There are obviously many other reasons why owners sell their business. It is wise to plan your company for sale ahead of time.