Selling one’s business can be a traumatic and emotional event. In fact, “seller’s remorse” is one of the major reasons deals don’t close. The business may have been in the family for generations. The owner may have built it from scratch or bought it and made it very successful. However, there are issues that make selling the best course to take. Here are a few of them:
- Burnout – This is a major reason, according to industry experts, owners consider selling their business. The long hours and 7-day workweeks can take their toll. In other cases, the business may just become boring – the challenge gone. Losing interest in one’s business usually indicates it is time to sell.
- No one to take over – An owner’s children can be disenchanted with the family business by the time it’s their turn to take over. Family members often wish to move on to their own lives and careers.
- Personal problems – Events such as illness, divorce, and partnership issues do occur, and many times force the sale of a company. Unfortunately, one cannot predict such events, and too many times a forced sale does not bring maximum value. Proper planning and documentation can prevent an emergency sale.
- Cashing-out – Many company owners have much of their personal net worth invested in their business. This can present a lack of liquidity. Other than borrowing against the assets of the business, an owner’s only option is to sell it. They have spent years building, and now it’s time to cash-in.