There are eight basic reasons for selling a business. The first three reasons are always acceptable to sellers:
The Number one acceptable reason is retirement. You have built your business, you are happy with its value, and you have no family members, friends or employees to transition it to.
The number two acceptable reason, personal matters, such as poor health or divorce.
The number three acceptable reason, the industry is changing and the company needs someone who can keep up with the changes.
These three reasons give a prospective buyer confidence they too will be able to operate the business as long as their skill set, health and happiness are maintained. However, there are five other common reasons for selling a business that often give buyers pause:
The first reason is boredom or fatigue. This will entice the buyer to think how long before I am bored? Is this business too taxing for me?
The second reason, poor financial performance and/or economic conditions. If things are bad for you, is a buyer really going to be interested in buying your headaches?
The third reason is either key employees or partners have left or are not cooperating.
The fourth reason is you want to invest in other projects. If you have better projects to invest in other than this business, that is a strong signal to a buyer that he may have better projects to invest in as well.
The fifth and final reason, you have a buyer who has expressed interest in purchasing the business. Most buyers will question why the business did not sell to that buyer. Are your terms unreasonable? Are you really motivated to sell? Buyers will be wary of wasting their time in this scenario.
Irrespective of your reason for selling your business, the best time to sell your business is when it is still growing and making good money. However, it is important to think about why you want to sell your business and how to communicate your reasons for selling to a buyer, to assure them the business is sound and you are motivated to sell.
So, let me cover the three acceptable reasons for selling your business, one more time:
Retirement
Personal matters such as health or divorce
And, finally, the industry has changed and you have the wrong skill set to take the business to the next level.
If you have any questions regarding preparing your business for sale, please do not hesitate to contact your Florida Business Exchange intermediary for a complimentary consultation. I wish you the best of luck in pursuing your after sale dreams, and having our team of professionals helping you through the process.
Need Help?
Chris Savage
813-784-4457
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