In the back of their heads, many entrepreneurs are thinking, "when should I sell my business?" Owners who ponder over selling their business does not always do so out of financial desperation or trouble but usually because they are looking for the next opportunity.
1. Business value
Collegue John Hammett is an investment banker at Corporate Finance Associates and a former company owner himself. At one point in his career, Hammett was working for an entrepreneur in his mid-50s who sold one of two divisions in his company. While working on the transaction with the company owner, Hammett learned some valuable advice that has stuck with him to this day.
2. Tired of risk
In the early stages of a business, owners are more confident in taking risks, because they don’t have much value in their companies yet to lose. Taking chances are essential and beneficial if the founder wants their business to grow beyond the initial stages.
3. Time for change
Cal Lai, president and CEO of Recom Technologies (who also is an Cerius advisory board member), points out that owners have many reasons for selling their businesses. Although a chance at liquidity is a good reason for an owner to decide it’s time to sell the business, it may not be the only reason. After dedicating 15 to 20 years of time, energy and resources into building a company, CEO’s and founders may find themselves ready for retirement. Or an owner may be ready for some change and seek a new opportunity. That could be motivation enough.