Why Sell Your Business? What are the really good reasons to sell and what are the poor reasons and why?
Hello, I am Paul Savage, business broker with Pacific Business Brokers.
Today I am speaking about what are the really good reasons to sell your business and also what are the not so good reasons to sell.
Everyone leaves their business at some point . It is inevitable. There are 2 types of business exits. Those are types are involuntary exits and voluntary exits.
Involuntary exits are related to the bad reasons to sell a business. These bad reasons include: owner’s health, family issues such as divorce, burn-out, poor business performance, problems with financing or problems among the ownership group. All are valid reasons for selling but bad reasons nonetheless.
They are bad reasons because the sale may not be of your choosing as it relates to the timing . That is, is this the right year for you to be selling, is the business ready for sale and also, what is the impact of a speedy sale? A speedy sale of a business that has not been prepared for sale will result in a disappointingly low price at inferior terms.
Here’s some key advice: To protect what you have built up from an involuntary exit, have you business ready for sale at all times.
The great reasons to sell are most often related to voluntary exits. These include:
- Retirement, other interests whether they be business or personal
- You have taken the business as far as you can and the business requires different skills and/or more capital
- You are bored, don’t want to drive business growth any longer and need a change
What’s special about those great reasons to sell? You get to choose the timing of the sale and you have an opportunity to prepare your business for sale. This is the ideal situation.
Here’s some key advice: take advantage of the time you have to prepare your business for sale. If you do, when you decide to sell your business you will have done what you can to maximize the value of the sale and optimize the terms of the sale.
A great place to start the preparation process is to have Pacific Business Brokers prepare a Most Probable Selling Price Report – it will provide valuable insights to preparing your business for sale.