Owners who ponder over selling their business may not do so out of financial desperation or trouble but usually because they are looking for the next opportunity or they are stepping away from running a business. Consider these reasons when you think about selling your business.
1. Business value and liquidity
When you have an opportunity to get liquidity in your company you need to seriously consider it. Running a business is risky and the longer you hold on to your business, the more chance you risk of failure. There is value in your business, but no liquidity until you go through a transaction of selling your company. Many owners wait too long to position their business for sale reducing their business value and ease of liquidity. Know the market for your business and keep your business prepared for an attractive sale.
2. Tired of risk
In the early stages of a business, owners are more confident in taking risks. Taking chances are essential and beneficial for a business to grow. Owners who are older, often avoid those risky situations where they could lose their company. Business owners should always be looking to exit their investment. Not because the company may be in a bad place but because it is a smart business decision. Business buyers do not want to pay for growth plans the owner was not willing to invest in. Exit your business now or take those actions that increase sales and net income for the next few years.
3. Time for change
Owners have many reasons for selling their businesses. Although a chance at liquidity is a good reason for an owner to decide it’s time to sell the business, it may not be the only reason. After dedicating time, energy and resources into building a company, the owners may find themselves ready for retirement. Some owners may be ready for change and seek a new opportunity. That could be motivation enough. Time is always a risk, and the more time your business is out there, the greater risk you could have.
Plan your exit and be ready when the timing is right to pursue your company’s maximum value. Sell it on your terms rather than the market’s terms. As your next step, consider contacting Sunbelt’s professional mergers and acquisitions advisory services team (info@sunbeltbayarea.net) to maximize your liquidity and value.
John LaMay is an Advisor with Sunbelt Business Brokers. He can be reached at (408) 436-1900, x 105, or at jlamay@sunbeltbayarea.net
