To Sell or Not to Sell: The Top Four Reasons Entrepreneurs Choose to Sell

Entrepreneurs, by nature, are people who spend a considerable amount of time looking for the next opportunity. And for them, ‘the next opportunity’ often includes a suitable time to sell their company.

But what, practically, are the most common reasons for sale?

1. Business Value vs Liquidity

Getting hold of liquidity in your company is a valuable opportunity, because while there is always value in a business, there is no real liquidity until all or part of it is sold.

Given that business ownership is in and of itself a risky endeavour, it stands to reason that the longer you own the business, the greater ongoing chance that there’s a risk of failure. Seen this way, it can become clear that time itself is a risk and that liquidity should be a goal sooner rather than later.

2. Life Journeys

Entrepreneurs are only human, and being human involves a ‘life journey’. For business people, that’s typically a progression from being an ambitious young gun looking to ‘make it’, through to a successful business owner looking to ‘grow it’, to a veteran looking to ‘exit’.

In some cases, life-journey exiting may be due to a wish to retire or slow down, but it can also be a case of looking for new pastures, greater excitement or even greater challenges!

3. Risk Fatigue

When a business is young, entrepreneurs take risks more confidently; the company doesn’t hold much value yet, so there’s less to lose.

But as the company grows, do does its value, and entrepreneurs naturally become more conservative and more risk-averse.

In addition, as business owners age they tend to become more reluctant to devote time and energy to fixing problems within the business, and with risk comes change and a greater potential for problems need to be fixed.

4. Opportunity Knocks!

Opportunity can sometimes present itself in such a way that the circumstance itself becomes the reason for the business sale.

Examples include meeting an individual or team whose experience, reputation and/or chemistry are so obviously right for your company that it makes total sense to hand over the reins, or coming across a different venture that appeals overwhelmingly, to the extent that an existing business needs to be sold to make way. Sometimes, opportunity really does come knocking.

For more information about selling your business, contact our expert team at Benchmark International.

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