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Common Reasons That Owners Have to Sell Their Business

October 3, 2012

Selling a business is never an easy decision. There could be various reasons for an owner to sell his/her company, however, the decision needs careful consideration as sometimes a hasty decision to sell can lead to feelings of regret, guilt, and loss later. The owner needs to assess the situation and determine whether they are ready to sell their business and prepare themselves emotionally and mentally for it.

Assessing the reason for selling your business is a major step towards making the decision to sell it. Some of the most common reasons for owners selling their company are:

Debt:  When the outgoing becomes more than the incoming, it is a red flag. A lot of owners end up losing their savings, their assets, and even their houses just because they keep investing and covering themselves with more and more debt to revive their business. A careful consideration of the option to sell the business to recover cost when the debt starts to grow uncomfortable is a good idea.

Business ceases to be profitable: This could be because either the product loses market appeal or the mode of marketing becomes redundant. This is in fact, a good reason to sell if it is not possible to better it in any way.

Passing it on to heirs: This is one of the most preferred ways since the business still stays in the family. Sometimes the owner can’t take the business to the next level, compete with the market, or perhaps they just want the new generation to begin managing the business.

New Business venture: A lot of small business owners start a particular business in order to generate enough income to start their ‘dream’ business.

Boredom: Owners often lose the excitement of owning a business and this happens when the stress of the business becomes unmanageable for them. It is important that the owner is completely sure that they do not want to manage it anymore, not just because of a one-time event.

Retirement: Many people plan their business in a manner to retire by a certain age, and when they reach their milestone, they sell to move on and enjoy their lives just as they had planned.

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