Making the decision to sell a business is never going to be a light one. Quite often people have built their businesses up for many. A lot of love and care goes into running one. With having to manage staff, stock and juggle all of the financial tasks in between.
Running a business is a commitment that only those with a true passion for what they do can achieve. However, there will come a time when you might need to sell your business. Below are some of the reasons that would result in selling up.
Retirement
Not all of us are blessed with the possibility of early retirement. However, for some, this does seem like an attractive option.
The age for a state pension in the UK is currently at 65. This is expected to rise in the coming years.
For some people, they contribute to a personal pension pot. This gives those individuals the freedom to retire earlier as they are no reliant on government funding. These pensions can generally be accessed from the age of 55.
Meaning that those with sufficient enough money can retire early. So what does this mean for business owners?
If you own the business you have been working in. Then essentially you could either sell your assets on or transfer them to a family member. This is usually the option for family-run businesses.
However, to some, this is not the case and the added money from selling off your assets can help towards that early retirement dream.
Debt
The dreaded debt, everyone has been there. Whether you owe the bank or you still owe your friend that tenner from last week. All adults carry a form of debt.
Now when it comes to running a business, it can be very expensive.
There will also be times where you run up debts and these can negatively impact how you run the business.
Quite often than not, business owners believe that if you sell your business then you are clearing any of your debt. This is not the case and in actual fact, you can pass that onto the buyer.
When the sale of a business is being negotiated. The buyer will be able to choose whether or not to take on the debts of the business. This usually called an assets sale. So if you are selling your business due to debts be aware of this.
However, you can still sell your business and then use the money from the sale to help pay off any debts you might have in your name. This could, however, lead to the close down of the business. This is usually called liquidation.
Liquidating a business is when the owner brings in an insolvency practitioner to sell off the assets of the company, close the company down, take it off the register and then any remaining money that is left after paying for debts will be distributed between stakeholders.
Liquidating a business is usually a last resort for owners that are failing to keep up with debts, rent and paying staff.
Change of Pace
A lighter tone now. You could choose to sell your business because you want to take on new projects. Or perhaps move somewhere new and start again.
A change of pace is a more hopeful option when it comes to selling a business.
When you move through life you will find that your goals and dreams may change. So essentially that business you have nurtured from its humble beginnings may no longer fit into the narrative of your life and future.
So when this does happen. People will more often than not find someone suitable to take over the business. Leaving them to move onto the goals they want to achieve.
These goals can vary from wanting to start a completely new and different business. Or you might find that the city or even the country you live in can no longer support what you want in life.
Choosing this change of pace can sometimes correlate with taking an early retirement too. Once you make the decision to do something different in life, running a business can sometimes hinder or get in the way, so making the decision to move on is the best you can do.
Rounded Up
Deciding to sell your business is never going to be easy. But rest assured when you decide to sell your business it will more than likely be for the benefit for your future.
Also with so many budding entrepreneurs out there looking to get started on their own business journey. You might find someone perfect for the take over of your business and keep its legacy alive and thriving.
