Running a company becomes a habit and part of a daily routine, and people have difficulty breaking habits. Most of the time, business owners are driven and passionate about their work, genuinely enjoying what they do. This means that some business owners work right up until the time that they physically can no longer do so. Retirement can happen unexpectedly, leading to a lack of a successor in place. When that happens, selling becomes the only option. In other cases, an owner has a well-thought-out plan to retire, and this helps to maximize your price and gives you the ability to retire more peacefully and on your own terms.
Fatigue, overworking, and burnout are substantial factors in many owners’ choices to sell. The ongoing decisions, stress, and daily grind of making a company successful begin to wear on those in leadership roles. Selling the business and enjoying the payout and freedom that come with it look very appealing in these scenarios.
The other side of burnout is boredom. Many owners find that they are simply no longer interested in the work. Some businesses naturally have a redundant model – for example, a small manufacturing facility that has limited production and no real growth opportunities that an owner wants to take on. In these cases, owners can find themselves bored and dissatisfied with their work lives. It’s common for company founders to want to innovate and try new things. This is why you hear the term “serial entrepreneur” in our industry. Some business owners decide it’s time to move on and into something more exciting.
Life is unpredictable, and the illness or death of a key company player or their family can cause business owners to sell. Business owners may need to become caretakers of a sick loved one, which leaves little time for running a business. Similarly, divorce is a common catalyst for selling – if married partners own the business jointly, a sale may be necessary to divide assets fairly. Family and health issues can sometimes trump business dealings, so companies faced with choosing might find selling to be the best option.
Some business owners have a great idea but not the capital to put it into practice. This is why partnership models can work in situations like this. However, over time, partners can begin to disagree about almost anything – from long-term goals to financial aspects to staff changes. Sometimes, partners become so agitated with each other that a productive working relationship moving forward is virtually impossible. Selling allows the partners to separate from their company and part ways amicably without dismantling what they spent so long creating.
Technology has brought a whole new wave of entrepreneurs. The internet and an explosion in private business funding have led to increased competition in many industries. Business operations that have been running for decades must innovate to stay relevant. When owners are unable to adapt to a rapidly evolving market and begin to see competition overtake them, the choices are to reinvest time and resources to compete better or to sell. This is a monumental decision for a business founder, but timing is critical. Selling when the company is doing well will yield a higher sales price than waiting for a “downturn.” The importance of facing these realities in a timely manner cannot be overstated.
