Why Business Owners Sell & When to Sell your Business: Tips from your California Business Broker

Chances are if you're a business owner and you've built a successful business, you have demonstrated that you have excellent timing and that you're able execute when needed. This could not be more true than when it comes to selling your business. Unfortunately, too many business owners wait too long to sell their business and the asking price suffers because of it.

It is time to sell your business when sales and profits are peaking, or almost peaking, and when your company is operating well and showing stability. Buyers will typically pay a premium for businesses that are showing year-over-year increases in revenue and/or profits. Put yourself in the buyer's shoes and ask yourself: "Would you rather purchase a business that is growing or a business that is constricting?"

You may have waited too long to sell your business if earnings have dropped dramatically, if you're in a position where you must sell quickly, or if competitors have passed you by. If this situation describes you, all is not lost. If there is a possibility that things can be improved, then it's advisable to wait, make the appropriate changes, and then sell your business.

It is also important to be realistic. You should continue to sell anyway if earnings are not likely to improve; competition is growing stronger; the market is getting weaker; products, pricing, and margins are eroding; you are burned out and simply aren't willing to do what needs to be done; or if health or age are a concern and a successor is not in place. Selling your business is an intensely personal decision and only you can truly assess your situation and know for certain when the appropriate time to sell is.

The reason why sellers sell their business is as varied and unique as the businesses themselves. I would like to share with you some of the more common reasons why business owners sell their business.

Far and away the most common reason why business owners sell their business is boredom or burnout. When I shared this fact with my non-business-owner friends, oftentimes they're surprised to hear this. I explain to them that people change jobs and careers all the time, and business owners are no different. In many cases the business owns the owner, not the other way around. Retirement is the next most common reason why sellers choose to sell their business. This is followed by children not having an interest in the business; the need or desire to liquidate; lack of capital; and lastly, partnership, splits, and divorce.

In the last two paragraphs, I talked about when sellers sell and why they sell. If you noticed, burnout is a big reason why people sell their business. I also talked about business owners waiting too long to sell their business. Do you see where I'm going with this? If you're a business owner and you are feeling burned out, I urge you to not wait too long. By planning ahead, you can position your business to be highly desirable for a potential buyer.

If you're a Southern California business owner and if you are feeling burntout, if you're looking to retire, or if you simply just want to sell your business, I would like to speak with you. Please

contact me today.

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