Have you ever sat back and reflected on your journey from being an aspiring business owner to an actual business owner? You saw that it had some high moments and some low moments, but despite the low moments, you’re glad you stuck with it…
Those are the same reflections business owners have right before making the decision to sell their business. Making the decision to sell a business is never easy but it’s also not always done because a business is in financial ruins. The pain of selling a business lies in the sacrifice and the blood, sweat, and tears it took to build it.
For many business owners, to reach the level of success they have, it required many sleepless nights, missing soccer games, and financial uncertainties, but in the end, everything worked out. Unfortunately, just like lots of great things, business owners face the decision of keeping or selling their business.
There are actually several different reasons why business owners decide to sell their business. But regardless of why they decide to sell, there is a proper process to undergo to ensure your business is sold at a fair price and terms, as well as making sure your valuation firm has your best interests put forth.
If you’re looking to sell a business, it’s understandable to feel sadness in letting go of all the hard work you put in building it but it’s also okay to feel joy in selling your business too… it all depends on the reason why you’re deciding to sell, ultimately. Whether you’re selling your business for better or worse, here are some common reasons why business owners make the decision to sell their businesses.
In the business world, there are always new opportunities coming forth, but at some point during your entrepreneurial career, there will come an opportunity that’s just too good to pass up. Sometimes to take that new opportunity means you have to let go of your current business to finance your new business venture, whether it’s doing good or bad. That is what most entrepreneurs would call taking a business risk.
The funny thing about how business works is that you could be running your business as usual, not looking to sell at all. Then out of the blue, a buyer has an interest in your business and makes you an offer you can’t refuse. Meaning, the offer was completely random and it was so financially attractive that it completely trumps your business… even the hard work you’ve put in it.
A business that’s financially declining is one of the top reasons business owners decide to sell. The hard part about trying to sell a declining business is that people don’t want to buy a business that isn’t making money… That is, unless they have the financial resources to pick up in the areas you were weak.
And that’s the thing about running your own business… When you first start out, it’s hard to tell which route to take, despite all guides on how to improve your business’ financial budget or the perfect business models for your business type… A business’s success boils down to smart decision-making and sometimes one wrong mistake can cost you your entire business, unfortunately.
Everyone has experienced burnout on their jobs at some point in their working careers. Signs of burnout include:
- Bad decision-making
- Careless mistakes
- Overall job dissatisfaction
Those signs can also lead to health conditions like depression and lack of passion. Where the irony lies in burnout with entrepreneurs is that according to the Harvard Business Review, passion is the very thing that pushes entrepreneurs to take their business to success yet passion is also the very thing that makes entrepreneurs less passionate about their business, leading them to experience the symptoms of burnout.
Various studies have been conducted and the evidence shows that entrepreneurs are at a higher risk of burnout because they’re too passionate about work and have tendencies to socially isolate themselves. Once you lose the passion that prompted you to start your business in the first place, the next reasonable thing to do is sell it… not only for financial gain but also for your mental health.
Typically, when business partners have issues to where they both agree to dismantle the business, it’s common for one business partner to buy out the other partner’s share of the business. That’s the ideal solution but oftentimes isn’t what happens.
The issues that can ensue between business partners can be a range of different things. One partner can feel left out of certain decision-making processes, or the partners just simply don’t see eye to eye anymore on how the business is run. It can be anything.
The terms of the buyout and buy out price are typically the major factors that the partners can’t seem to agree on. That reason alone is why it’s wise to bring in a business broker to offer their advice and assess a fair asking price.