Top reasons why owners sell their business

Mike Whittle, M.D. of EvolutionCBS

Over recent years, the reasons that business owners give for their wanting to sell and move on have increased.

They don’t all want to put their toes up, though. In this modern, tech-enabled era, many entrepreneurs below the age of twenty-five have grown and sold a business and 90% of them want to stay working in the business that they sell. The same applies to 30% of forty-five to fifty-four year olds.

Retirement has been unceremoniously knocked off the top spot as the Number One reason for selling.

 

 

Here are the top reasons why owners sell their business:

1) BURNOUT

This might not come as too much of a surprise, given that nearly three quarters of all business owners admit to their regularly feeling isolated or lonely. According to Livingstone Partners’ “Heart of the Deal” survey in which two hundred, mid-market company founders were interviewed, 77% of them said that they put the needs of their businesses over everything else – including family. That trend stretches across all sectors.

2) RETIREMENT

Still high in the charts but knocked off its perch for two reasons.

Firstly, the number of burnt out, stressed business owners has increased at an alarming rate.

Secondly, owners seldom have a successor ready to whom they can pass the business. Fewer family firms pass from generation to generation now. That, coupled with the average permanent role’s growing shorter over recent years, means that owners reaching retirement age often find themselves without anyone within the company who is prepared and willing to take over the leading role.

3) ILLNESS/FAMILY PROBLEMS

Higher divorce rates and longer life have increased the pressure put on modern business owners to spend more time at home, despite the research’s showing that 77% of them prioritise the business over everything else.

4) WEAK POINTS WITHIN THE BUSINESS

The temptation to sell before a financial problem is aggravated is a valid and often favoured solution.

It’s undoubtedly a sad one, though. Many times, the right consultancy can help to turn things around before a weak, contingency sale is pushed through.

5) INCREASED THREAT OF COMPETITION

In a growing market, an older, more established company can be squeezed out unless it’s willing to invest in new blood and new ideas. If this is not feasible, selling is often a progressive, next step.

6) PART OF THE BUSINESS STRATEGY

Appearing traditionally lower on the list, as just over half of all business owners say that selling was a part of the strategy from the get-go. Of those, significantly less actually stick to that plan over time.

7) THE CHANCE OF A LIFETIME

Disappointingly last on the list, but no prizes for guessing as to why! Would that everyone had a gift like this come to them at least once. Wishful thinking, perhaps.

It’s true to say, though, that with the right preparation, selling a business can be the chance of a lifetime in itself.

Find out how you can start to prepare your business for a sale by talking to one of the team at EvolutionCBS – www.evolutioncbs.co.uk/contact

You’re welcome to come along to one of our EvolutionCBS Masterclasses or workshops www.evolutioncbs.co.uk/events

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