It’s a question every successful business owner must eventually face: when is the right time to sell?
For many owners, their business is their baby. They’ve toiled for years, if not decades, working on it and poured themselves into making it a success. Selling would not only mean saying goodbye to loyal longtime employees and customers, but could also mean a loss of identity. It is obvious why many would not make such a decision lightly.
There are plenty of reasons a sensible entrepreneur might have for selling, including capitalizing on the current market for business sales. Remember that a buyer often asks why a business is for sale, so knowing your reason and being able to explain it is critical. At Alliant, we start the process with a free conversation about both your business and your future goals. This helps our clients have clarity and peace of mind once it’s time to bring the business to market.
You might realize one day that you want to spend more time at the golf course rather than the store or office. Maybe your friends are getting to that age too and you want to spend more time with them. If retirement is around the corner, selling could be advantageous.
Entrepreneurs are not super-human. They can still fall prey to afflictions that regular employees fall to within a job. Owning a business is a tremendous responsibility and usually requires a massive amount of hours to run. Over the long run, some entrepreneurs will grow weary of the stress and feel burned out or they might have a health concern that affects their ability to run their business. Either way, it’s time to consider selling the business.
An entrepreneur’s business is often the largest single asset he or she owns. It’s no surprise that there might be a financial reason to sell.
Retirement costs add up quickly and most business owners consider their business a significant part of their financial portfolio. Although a business could provide monthly profit, it’s often recommended for retirees to have a more diverse portfolio of investments instead. Liquidating the business could provide the necessary funds.
On the other hand, the owner might want to stay in the game of business but be looking at another opportunity. Perhaps they’ve always wanted to own a cafe. Or maybe they believe now is a good time to build single-family homes. Either way, selling the older business to fund the new one is one way to raise the necessary capital.
We’ve helped hundreds of clients over the years and our experience has taught us there are a number of other reasons to sell a business.
Sometimes, you just get an exciting offer. Bid amounts vary widely and waiting for a similar figure to come along again could take years.
Businesses rise and fall. If your industry is set to take a hit, it might be wise to sell now. Perhaps there is increased foreign competition or customers are spending their money on a different product.
Maybe you’ve had a good run for the past few years. With a little luck, you were able to keep capital expenditures down and revenue kept growing. The business valuation is strong and it would be an advantageous time to sell.
Remember that there is no perfect time to sell a business, but there are plenty of reasons to take the first steps toward that process. If you’d like a free opinion of value with no risk and no strings attached, contact us today to talk with an experienced member of our team.