There are number of reasons that influence a business owner to sell their business starting from new business opportunity, change in market conditions to ill health, retirement etc. Nobody wants to sell their business as taking up business sky high involves immense hard work and money, so you must have a strong reason of selling up your business. In order to give you a broader overview, we are listing down some of the important reasons why business owners choose to sell their businesses. We hope that you will found these reasons valid and can even relate to any of these in case you are thinking of selling your company.
Common reasons of selling a company
– After hitting a certain age, you are not able to work as efficiently as you were working continuously from last many years and it may put a hit on your performance. Therefore, business owners in old ages usually take the decision of selling up their businesses and use that extra time for relaxation or to enjoy the rest of their lives.
You may also sell out your company when you didn’t find any suitable option in your family or in relations to handle the business. Selling your company due to retirement provides you enough time to plan your exit strategy and to achieve maximum sales value.
2) Ill health
– Ill health is also one of the most common reasons of selling up a company. A business owner always sees a time, when health doesn’t allow him to continue further and their presence gets reduced in the active operations of the business. It is usually seen that when owner becomes ill, business operations continue to struggle. Hence, ill health affect is one of the reasons that force a business owner to sell their company and move on.
3) Poor business performance
– Struggling enough in a business is not everybody’s cup of tea. Usually a business owner struggles until the limits are crossed but when a business owner finds no way further, decision of selling the company is taken. Continuous decline in the business performance influence the business owner to sell their company and sell that even at a reduced price.
4) Relocation requirement
– It may be possible to relocate the company but sometimes business owners take the decision of selling it up because of the following relocation challenges –
- Hiring of new staff
- Dismissing or moving of existing staff
- Changing of suppliers
- Moving property
When a business owner gets such challenges, they usually prefer not to relocate and sell their company to grab a similar business opportunity with the selling value. Hence, relocation requirements might force a business owner to sell their own company.
– Boredom is closely related to retirement. If a business owner is doing a business and getting success but not finding it encouraging, then managing it for longer period doesn’t hold the same appeal like before and becomes boring. Hence, lack of drive and enthusiasm may influence you to sell your company.
6) Business in demand
– There might be a time frame when you have a strong buyer demand because of industry growth and favourable buying conditions that influence you not to turn down the big price offer from buyer side. In such cases, business owner generally ends in selling up their company.
7) Expansion problems
– When a company reaches a certain size, business owner have to face challenges of different nature in comparison to the challenges they were facing when they started their business. Many business owners unable to expand their companies due to lack of funds, experience etc. and they end up passing their businesses into the hands of larger organisations.
8) Changing market conditions
– Changing market conditions is one of the most important reasons that influence a business owner to sell their company. Conditions of a market changes every now & then, that may take a growing business down or a non-working business to heights. If you know that the product or a service your company is providing will become obsolete in the coming time, it is better that you cut down your losses and sells it off to receive high value for your business.
9) New opportunities
– Generally, business owners look for new business opportunities in different industries or markets and if they found it good in comparison to their existing business, they may take a jump from one business to another. But before doing that, you must have knowledge about the real market value of your largest asset – Your business, which you need to sell in order to grab the new opportunities.
10) Decline in profitability in the coming time
– It is the most common reason of selling a business. When business owner sees that their business profits are going to decline as the business has already reached the peak of its profitability, then the business owner starts planning to get out of it. Forecasting is considered as the best way to identify future opportunities and problems.
11) Enough cash to support future
– When a business owner finds that their business is going good and having enough cash in their hands to fulfil their future demands, it may ends up in selling of the business. Business owner may sell the business for any future business purchases, retirement or to fulfil their family needs.
12) Industry changes
– There are inherent factors that may cause industrial change and if you are working in the same industry, you need to face it as a challenge. Some of the industrial challenges are a follows –
- Introduction of new legislation
- General regional downturn
- Political factors like Brexit
Hence, it is also considered as a big reason for a business owner to sell their own company where factors are usually imposed.
A business owner must take all factors into consideration while selling their company as it is a big decision and must be taken cautiously. You must consult your family, relatives or even accountant before arriving at such decision unless it might go wrong.
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