If you’re like many entrepreneurs, you’ve spent years running your small- or medium-sized business. Perhaps you inherited the responsibility from your parents or grandparents. Maybe you built your company from the ground up entirely on your own. Whatever the circumstances that led to where you are today, deciding to sell your business is rarely an easy choice to make. However, if you’ve found yourself thinking frequently about finding a buyer, it’s time to take a look at potential reasons. Here are the seven most common.
1. You’re Ready to Retire
Are you in your 60s and thinking about retirement? If so, you’re certainly not alone. According to the US Administration on Aging, people aged 65 and older made up 17 percent of the country’s population in 2020—and that number is expected to grow to 22 percent by 2040.
If you have children or other relatives who have the right skills and are interested in taking on the challenge, you may want to give them the opportunity to buy your business before listing it for sale on an online marketplace like Smobi. However, whether you sell to a family member, a friend, or a third party, the profits from selling are a great way to supplement your retirement savings.
Without the responsibility that comes with business ownership, you’ll be free to travel, move to a different city or state (or even country), spend more time with your grandchildren, or finally have the opportunity to focus on your hobbies. Whatever activities you pursue, you deserve to enjoy the fruits of your labor while you’re still young enough—or healthy enough—to make the most of them.
2. You’d Like to Start a New Business
Did you know that 5,044,748 new businesses were started last year? That’s the number from the US Census Bureau for 2022—and not all of those ventures were started by brand new entrepreneurs.
If you’ve spent decades doing the same thing every day, it’s natural to desire a change. Selling your current business will free up capital to invest in starting (or even buying) a new one. And whether you’re interested in launching a business within the same industry or want to try your hand at something entirely different, you’ll likely still benefit from your years of experience and the related skills you’ve acquired.
3. You Don’t Have the Capital to Keep Up with Changes in Technology or Regulations
Over the years, many industries are forced to change with the times, modernize technology and equipment, and conform to new government and industry regulations. This can be tough on small- and medium-sized businesses—and especially so for the business owners who don’t have the capital required to evolve.
One study commissioned by the US Small Business Administration found that the annual cost of federal regulations in the United States had increased to more than $1.75 trillion in 2008. Small businesses—defined as companies employing fewer than 20 workers—carried most of that burden. Each one faced annual regulatory costs of more than $10,000 per employee.
Rather than contemplate shutting down entirely, why not sell your business to a buyer who can infuse it with the funds needed to remain relevant and compliant? This way, your legacy remains intact, your workers may be able to continue their employment, and the company can continue to generate revenue within your community.
4. You Want to Part Ways with Your Co-Founders
What may have been a near perfect match initially can sour over the years. If you founded your business with a partner or partners, and you’re spending a lot of time bickering over day-to-day operations or your plans for the company’s future, it may be time to sell and go your separate ways.
In some cases, a co-founder may become the buyer. However, if no one wants to continue on as the company’s owner—or you’re unable to agree on terms for a buy-out—selling your business to a third party is always an option.
5. You’re No Longer Physically or Mentally Able to Run Your Business
Maybe you’ve worked well into your senior years and you’re finding it more difficult each day to handle the physical demands of your work. Perhaps you’re burn’t out or you’ve received a serious medical diagnosis and have realized that you’ll soon be unable to properly run your business. These scenarios are not uncommon.
Securing a buyer for your small business can enable you to slow down, focus on your health, and better enjoy the years you have left.
6. Your Business is Doing Really Well
Is your company thriving? Are your revenues going up year after year? If so, this is actually a prime time to sell your business. Entrepreneurs and investors who want to buy a business will scrutinize financial metrics such as cash flow, margins, and sales trends. Typically, you’ll get higher offers from potential buyers when your business is most profitable.
And remember, a sale doesn’t have to mean retirement or taking a leap to start something new. You may have the opportunity to continue on with the company as an employee—possibly even running the business for its new owner.
7. Your Business Has Unrealized Potential
If you’ve found yourself spending most of your time working in your business and left with no time to work on your business, it could be time to sell. Planning for and managing growth are important aspects of running a successful company.
Not sure if this is you? Maybe you’re running behind on fulfillment because orders are coming in too quickly. Or perhaps you’re turning down orders or requests for proposals. You may have been told by clients that they’d gladly double or triple what they spend with you, or you’ve had to ask your current customers to stop referring others. These are all signs that you’re not realizing the full potential of your business.
If your industry is doing well—and market signals show it’s likely to continue to do so—you can easily find a buyer ready to take your company to the next level.