Business owners might want to monetize their life’s work for several reasons, even when a business performs well and market conditions are favorable. As an owner, you may be ready for new challenges or want to diversify your business assets. You may recognize that new technology and customer behaviors are reshaping your industry. You may also want to fund a significant lifestyle change.
The most common reasons for selling a business tend to fall into a handful of categories: Personal, Financial, and Market Conditions. Personal factors include burnout from prolonged stress, or the desire to unlock capital to allow you to retire and travel widely or pursue a personal passion. Financial reasons include the emergence of new business, job, or investment opportunities that offer substantial advantages. Conversely, selling may reduce risk if you anticipate potential liabilities.
A third scenario includes factors external to you and your business, such as market changes driven by socio-economic volatility or advances like AI, which are likely to disrupt your industry and pose risks. On a more positive note, you might receive an offer you “can’t refuse,” or want to maximize profit by selling while your industry is doing well. After all, you can apply your well-honed skill set to another endeavor with promise.
In our global economy, market dynamics frequently shift—sometimes dramatically—making it a compelling reason to sell. Owners may find that a declining economic cycle or other forces are impacting their business in ways that can benefit from fresh leadership or an infusion of capital from buyers who will invest in growth.
If you’ve considered selling, it’s wise to do so when your company’s value is at its peak, your personal goals align with selling, and the business does not rely wholly on you. Be sure you’ve adequately prepared with no unresolved liabilities. And be aware of emotional attachment—a frequent reason owners don’t exit, and businesses are never sold. Finally, you’ll want to engage trusted advisors who can offer strategies to help you enjoy the greatest financial benefit.
hbr.org/2006/03/knowing-what-to-sell-when-and-to-whom
forbes.com/sites/liendepau/2024/06/14/when-should-i-sell-my-business/
forbes.com/sites/jodiecook/2021/09/13/5-signs-its-time-to-sell-your-business/
eonetwork.org/blog/5-market-shifts-that-could-compromise-your-business-and-how-to-prepare