The Top 5 Reasons People Sell Their Business

The underlaying reason why a business owner makes the decision to sell a business is not always about financial reasons, but to free up resources, focus on other priorities or make time for other opportunities. In this essay, we will talk about why owners decide to sell a business, along with steps to ponder about when preparing for the sale.

The Top 5 Reasons People Sell Their Business

1. Retirement

Retirement is arguably one of the most famous reasons why business owners decide to sell their business or establishment. After years of investing time, efforts and sacrifices, you must make sure that you have properly planned your retirement. Before realizing the sale value however, you should consider planning for continuity, for yourself as well as for the business. Depending on the nature and timing of the planned deal, preparations should include delegating responsibility to trusted directors and senior managers, as well as taking tax and pension advice to optimize the date of your intended retirement

2. Lack of funds for growth

The income and the status of your business is not always steady as you think it is. Due to changes in the wider economy and variations in bank interest rates, credit opportunities may not be available or practicable. And often, it’s the reason why lack of funds for growth happens in your business. In such lifestyle or situation, maybe selling part of your business will help you to enable expansion or access to other resources that can help you grow revenue, alleviate costs or diminish risks.

Maintaining healthy liquidity is important and pivotal and must be prioritize for an active consideration before selling all your business properties and assets.

3. Lack of drive or inspiration

Eventually, there comes a time in our life when we don’t know our purpose anymore. There will come a time when we start to question ourselves about the decisions we made in the past. boredom and burnout can affect even the most motivated and resilient of entrepreneurs. If you feel like your business is not for you, that’s probably one of the reasons why your business is not growing as what you imagined it to be. During the rudimentary stages, startups tend to take risks almost by definition to achieve organic growth. At this point, owners tend to be more confident with a thinking that they will succeed and that their business will grow and flourish. However, as time passes over, owners grow older, changed their perspectives and became more concerned about losses. Perhaps understandably, you may have begun to lose interest in what was a passion or pet project. Nevertheless, it is still necessary to present the business in the best condition, most especially when you are selling up.

4. Ready for the next new project

There are times when, entrepreneurs set up businesses with a planned exit strategy and sale date in mind from the outset. Meaning, while your business is on the verge of growing and becoming huge, you already have plans to sell it out. In such instances, it is essential to leave room for the business to grow so it represents an interesting new opportunity for a prospective buyer. And in that way, you can demand a higher rate to the buyer. Occasionally, potential buyers ask why a business is for sale if it is profitable— i.e. what’s the purpose? Ironically, it is when a company is at its most profitable that it is often the best time to sell. Why? Because the more successful your business is, the higher the price.

5. Losing partnerships

Profit motives and increasing revenue may not be enough to maintain everyone’s long-term interest, but not giving a growing concern your full attention usually results in lost opportunities. It could then be wise to look for something new – perhaps more fun and challenging. Growth can level off or become stagnant as teams change. Additionally, falling out with a partner or colleague can leave a bad taste. If this happens, it is best not to let this reflect throughout the organization when putting it up for sale. Maintaining a professional approach is likely to help realize the best-selling price. Technically, most successful business owners prefer to keep a watchful eye on the possibility of selling up and realizing their investment because timed correctly, it can be a smart decision.