Why Should I Sell My Business?

Consider putting your company on the market for several reasons. The reasons can vary based on the stage of your business's lifecycle and what your goals for the future may be. No matter your situation, it is always a good idea to step back and look at the big picture to figure out your options.

Momentum Is Strong
Ironically, sometimes the best time to sell a company is when it is thriving. This is because you can extract the most value from your business when it is profitable. Buyers want companies that are doing well, growing, and having a bright future. Even if you are not ready to retire, you can still sell and have a solid foundation for a secure financial future while remaining involved with the business. You can sell and stay on for a certain period and help the new owner run the company. Or you can make a partial sale where you remain the part owner. But if your business is doing well, you may be able to sell for more money than if you wait for the perfect time for emotional reasons. While your business may hold value, there is liquidity in it once you enter into a transaction.

Time for Change
After spending years or even decades pouring all of your time and energy into your business, it is the right time for you to change things up. Whether that means retiring or moving on to another venture, you don't have to keep doing the same thing you've done forever just because you feel like you owe it to the business. Instead, the right buyer could favor your company because they aren't burnt out and have a fresh perspective regarding its future.

Risk Mitigation
When your business is in its early stages, you tend to be more willing to take risks because you don't have as much to lose. Taking chances is an important part of building a successful venture. But as the business grows, its value increases. This is when you become a little more hesitant about taking risks because you have so much more to lose. If you have owned the company for a while, you may have reached a point where you are no longer willing to deal with various risks. This isn't a bad thing. Owners should always be considering exiting their investment simply because it is a smart business decision.

Shrinking Industry or Increasing Competition
As the world undergoes rapid innovation, many industries and businesses are reshaped by such sweeping changes. If your business cannot adapt and create new products or services, what offerings you do may become irrelevant. So, if your sector is shrinking because it's being pushed into obsolescence by the next big thing, you may want to seriously consider selling. This is also true if your sector is flooded with new and innovative competitors. Selling while your company is still relevant could be smart rather than waiting for a competitor to take over your clients and the market. Or, you can merge with a competitor so that you both benefit from working together. You gain their innovation, and they gain your experience and customer base.

Profits Are Down
If you see a pattern that indicates that your profits are declining and are not bound to turn around, it is a good reason to get out before nothing is left. Some buyers have experience in turning around suffering businesses and will be willing to do so if your company still has the right amount of potential.

Loss of Human Capital
If you are struggling to retain or recruit new talent, it is a sign that you should consider selling because it is also a sign that you may not be passionate enough about making the best decisions for the company's future. You have to have the energy to keep a business growing, and if you cannot keep the right people on board, the opposite is eventually going to happen. This is also the case if you are losing important clients, especially if they have been with you for a while. Your business needs new strategies and ideas to keep people interested, and if you have stopped investing in those ideas, it is going to show when people start moving on.

Partnership Opportunities
Again, joining forces with another business—even a competitor—can get you a bigger slice of the pie. A merger, strategic partnership or strategic alliance can be a fantastic strategy for growing your company in several aspects, including manufacturing, business space, innovation, supply chains, vendors, and clients. Finding the right partner whose values, goals, and culture align with your own could be the best move you could make as a smart businessperson.

Succession Planning
If you plan to have someone in the company or in your family take over the business, it can be a major deciding factor on when to sell. Not only do you want to be ready to leave, but you also want whoever is taking over to be ready to do so. If you still need to get a succession plan, you may have to do more in-depth planning before a sale. For family-owned companies, many owners prefer to wait until the next generation is old enough and properly trained. From a buyer's perspective, acquiring a company with an existing succession plan in place can be a major draw for private equity looking to get into silent ownership.

Retirement
What better reason to sell your company than to retire and ride off into the sunset? You've worked so hard to build up the success and growth of your business. You deserve to enjoy what you've earned before you're too old to do so. Even if you're not ready for full-time retirement, you can choose to sell and stay part-time so the business transitions well while you transition into your next phase of life. No matter your choice, it is always wise to work with an experienced M&A specialist to help you make the right choices and create the best exit plan.

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com

ABOUT BENCHMARK INTERNATIONAL:

Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $9.4 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.

Website: http://www.benchmarkintl.com
Blog: http://blog.benchmarkcorporate.com