Why people sell their business and how to sell yours
No doubt, a lot of people are shocked when a business tycoon decides to sell a venture that has taken years to build. People sell their businesses despite all the hard work put in to get it to such great height. It is equally necessary to note that the common public perception that a business owner wants to sell his enterprise because of failings is wrong. There are numerous reasons as to why entrepreneurs decide to sell their venture; it is not always because the business is failing. Understanding why people sell their business is vital but having knowledge of how to sell your business is very much essential.
To invest in something bigger
Big businessmen/women sell their business sometimes due to certainty of a greater venture which is more profitable. They feel the time and hard work put in their current venture should be channeled to the new opportunity. More financially rewarding ventures comes with the decision to sell your business to focus all your attention on the new venture especially when you know that you lack the capacity to handle both. Looking to sell your business at this point might not be a bad idea after all.
One of the most common and major reason people sell their business is because they have to retire. People decide to sell when they want to retire and do not see any willing and capable hand to take over the venture, selling for them is the best option at this point. A great advantage associated with selling your business due to retirement lies in the fact that you have ample time to plan your exit strategy.
Needless to say, a lot of people buy businesses to remain active after retirement but come to think of it, a lot of businesses wind up when the owner is aged and retired. To avoid this, it is better to sell and maintain that source of revenue and employment to the society. Some might ask: what about people with retirement savings? Selling your business can give you an additional amount of money needed to pay off your mortgage or even purchase a new house that you will retire in. Also, you have to note that people also sell their businesses at retirement to enjoy from what they have built over the years. Not everybody sells because of the absence of a new individual to takeover.
The popular clique ‘’health is wealth’’ comes into play here, we can only do daily business transactions and close up deals when we are in sound and good health. There are certain situations that are health related and we cannot control as we do our business. Some business owners at a point fall to poor health condition and the strength to continue is gone. A lot of businesses are reliant on the owner and when this becomes the scenario, the business might suffer. The choice left most times is to act fast and sell the venture when it is still of high value.
An entrepreneur may not want to sell his/her business but when it is the only option left, there is no way out. If you are diagnosed of a life threatening health challenge like cancer, then you have to start making efforts to sell especially when you know that your business cannot survive without you. This is because, your poor health will surely affect your business negatively, there is no point trying to remain active in business when your body cannot take the stress associated. You should take a leave early before symptoms of the disease starts kicking in and it becomes obvious to the public you cannot continue. If you leave when your business is still of great value, you make more money from selling it and see out your health challenges compared to quitting when your business is of less value.
When your business continues to regress rather than grow despite great amount of money invested and hard work put in, selling it could be the best step to take towards moving forward. Walking out is usually the best option to avoid the business declining further with less value. You might not profit much, but it gives you something to use in venturing into something else because failure in the previous enterprise is signal you are not meant to be there in some circumstances.
Changing the location of your business might be a good reason to sell. Maybe when you started, the location was best suited for your trade but as you progress, you find out that the position is no longer favourable. To save yourself from this, you might decide to sell and move to a new location or even start something new.
How to sell your business
One does not just wake up and decide to sell his/her business, there are factors associated with letting go of venture which took you years to build. An entrepreneur trades carefully to avoid mistakes with grave consequences. Understanding how to sell your venture is necessary when you have made up your mind and seen it as best.
Letting go of an enterprise you have invested so much time and capital into is not an easy call to make. You have to think critically before taking this step so that you will not regret later. Once you are done thinking and you are certain that selling is a great idea, then there should be no stopping you.
The value of your business is great determinant when selling to an investor. Generally, an enterprise is worth a multiple of its profit. Do not sell your venture if it will not meet up to your financial demand. There is no point selling and still looking for loan avenues, if the business is not worth selling, you should build, unless you do not have a specified financial target.
Plan your exit strategy
Preparing your exit strategy early is important when you are about selling your venture. If you are fortunate that no unexpected circumstance force you to sell when you are not prepared, doing your exit strategy early is a great idea. This helps you execute your plans effectively.
Prepare your executive summary
This document gives a complete explanation of your business. Questions such as what is your business? What is your daily sale? How much is your business worth? Are all answered in your summary. With this, the buyer is aware of the venture he/she wants to takeover.
Get a financial broker
The fact that you are excellent in executing business deals does not mean you will equally be good at finishing deals when selling your business is involved. At this point, you have to get a financial broker to help you through the process. The advantage of a financial broker lies in the fact that you could sell your business for a bigger amount compared to when a broker is not involved.
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