Planning to Sell Your Business? - Know Why You're Selling the Business
Among the ten things you need to know before selling your business, this one may be the most important, yet many business owners don’t fully contemplate their reasons for selling. They just know they want to sell. The problem is that a lack of clarity in the reasons for selling will likely lead to unrealistic expectations and/or the use of the wrong strategy for selling the business. Either way, it invariably results in an unsuccessful outcome, if not outright failure.
Do you WANT to sell your business, or do you NEED to sell your business?
The reasons for wanting to sell the business can be vastly different than the reasons for needing to sell the business. Generally, business owners who decide they want to sell are in a position to plan their exit and develop the strategy around its timing. Business owners who need to sell their business may be forced to let circumstances dictate the strategy, which can reduce the amount of control they have over the process.
|Reasons for Wanting to Sell||Reasons for Needing to Sell|
|• Loss of enthusiasm, boredom, looking for new opportunity||• Health reasons|
|• Lack the capacity to take it to the next level||• Cash flow crisis|
|• Part of a long-range plan||• Deteriorating business environment|
|• Unwilling or unable to invest in the company's growth||• Loss of key employee or competitive advantage|
Motivations are the key to determining the selling process
This is not to say that business owners who need to sell can’t have a successful outcome, nor does it mean that business owners who want to sell always achieve one. There are still more questions that have to be answered in either case. The critical point is whether or not business owners fully understand their true motivation for selling. Done right, business sales are strategic transactions that are shaped and influenced by the underlying motivation for selling the business.