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What are the common reasons to sell a company?

Thursday, 22 January 2015

Senior male leaderIf you are selling your business and it is making a profit then it will have a value. However, even if your business is not making a return it may still have a value if it has the potential to earn.

Before you sell your business you need to be clear about the reasons why you are selling, as this is one of the questions prospective buyers will ask. Being transparent about your reasons will increase a buyer’s confidence in you and may even help you to achieve a better price.

Retirement

Retirement is one of the most common reasons for selling a business. Many business owners looking to retire want to release the value built up in their business, maybe to act as part of their pension. A benefit of selling due to retirement is that you will have an idea as to when you want this to happen which will help you to plan in advance and to get the best possible price when you do sell.

Divestment

As a business owner your business will make you asset rich, but you may have limited cash available to spend. Divestment means that you are able to release some (or all) of the value from your business in order to invest it elsewhere.

Relocation

Perhaps you want to move area or even country? Businesses can sometimes be difficult to relocate without incurring potential disruption or risk. An alternative to relocation would be to sell the business, releasing its value, and start afresh in your new location.

Poor performance

If the business isn’t performing well then the solution might be to sell. However, if possible it is better to turn your business around rather than waste all of the hard work, time and money that you’ve put into it and to sell it for a lesser value.

Other opportunities

It may simply be that the time you have had with your business has passed and the desire to move on is strong - maybe you’ve achieved all you wanted to do. There’s nothing wrong with letting someone else take on the company whilst you pursue new challenges.

So whatever your reasons for selling your business – don’t be afraid to cash in on all your hard work!

For further information on the process of selling your business and what’s involved, click here.

To see the services that Rollingsons provide to support you selling your business click here.

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