There are around 30 million small businesses in the U.S, making up 99.9% of all United States businesses.
Running your own business gives you independence, personal fulfillment, and lets you live your passion every day. But occasionally life gets in the way and you may need to sell.
Not sure why you should sell your business? Here are seven reasons why selling your company is the right thing to do.
1. Burnout
Research found that 50 percent of employers working in startups suffer from burnout.
One of the major reasons for sale is if you’re suffering from this. Burnout is where you experience physical, mental, and emotional exhaustion for an extended period, often because you’re swamped with excessive workplace responsibilities.
Many business owners take different approaches to improve their revenue but they may feel unmotivated. Sound familiar? Then that’s when to sell your company.
Or you may have health problems and need to step back. Fortunately, selling your business lets you slow down and recuperate so you can enjoy activities you don’t normally have time for.
2. Partner Disputes
"Why would someone sell a profitable business?" You ask.
A strong partnership is the lifeblood of any company but if this relationship turns sour then it’s time to sell a business. In an ideal situation, one partner will buy out the other but it’s problematic if they can’t agree on a price.
Another reason you may need to sell if one or both partners die. A spouse or family member can provide details on the business to buyers so they can decide whether purchasing the company is a good idea.
3. Another Business Opportunity
Regardless of whether your current business is successful, you may want to dabble in a different industry. But before you can do this, you must sell your business so you can finance your new company.
It's important to devote your time to your new venture instead of juggling two businesses.
4. Retirement
If you’re wondering “why sell a business?”, consider your age. Perhaps you’ve spent the last 30 years of your life running your company and you’re ready to retire.
You may have a retirement account aside but selling your business gives you a financial cushion so you have greater freedom with it.
But it’s wise to plan this early on. Your retirement date depends on how well your business is doing and how much profit you can make selling it now or the future.
Or, even if you’re not retiring, you may want to locate to a warmer climate for the family or a new city for business reasons. It’s important to have a definite timeframe of your relocation so there’s time to sell and you can find the new owner of your business.
This timeframe will affect how the company is priced and if you need to find specific buyers who don’t mind a short transition period.
5. Business Decline
You may have tried everything to turn your business around but nothing is working. Or maybe the county’s in an economic downturn and there is a high unemployment rate.
Your last resort is to sell your business before it values plummets and you lose everything. Ideally, you want to walk away with a decent profit for personal expenses or to turn it into a new business.
It’s important to note many buyers consider purchasing failing businesses because they see it as an opportunity to use their skills and techniques to turn the business around.
6. Tired Of Risks
In the early stages of running a business, owners are confident in taking risks because they don’t have as much to lose. Businesses often rely on risks so the company grows past the initial stage.
But once the business grows and its value increases, owners are less likely to take big risks as they have more to lose. Plus, older owners can’t spend years fixing bad strategies so, in their eyes, it’s easier to sell the company.
7. Your Business Is At A High Point
A company’s success ebbs and flows and often have different cycles. For instance, consider selling your business when it’s on an upswing so you get the most profit from it. Plus, you will look more attractive to buyers.
You can also sell the business to secure your financial future while working for the new owner. Or a business owner may not consider selling their business until a buyer approaches them with a fantastic offer. This is often way above market value for your business.
As this is a rare occasion, you may not want to miss it. Buyers do this if they’re passionate about your industry and think they can run it better. Another reason is they’re a competitor hoping to expand and want to buy your business so they can merge it with theirs.
That Is Why You Should Sell Your Business
Now you know the main reasons why you should sell your business.
Occasionally, selling your company is out of your control whether it is health problems or you and your partner disagree on everything. Other times, you may want to sell your business so you can change location or industry, retire, or your business is at a high point so it makes sense to cash in.
Regardless, selling your company can be a necessary wake-up call so you can plan your next business sales steps. Good luck selling your company!
