When To Sell Your Small Business

Some of the reasons why to sell your small business can actually have little to do with the company’s general performance. Health reasons may be one reason why a small business owner may need to sell their business. Personal concerns, such as divorce or partnership issues are other examples of why a small business owner may need to sell their company. Economic drivers are not the only issues that prompt many business owners to sell. Although owners may need and want to sell, it’s not always that simple.

Many business owners are looking to retire, but then realize they can’t afford to do so. Some business owners don’t want to retire or sell, they want more freedom in their lives. The day-to-day responsibilities of owning and operating a business can take their toll. Many business owners would like to be free of this burden. This type of owner has already “checked-out” mentally. This can have negative consequences for their business.

Sometimes an owner wants out but discovers that they can’t afford to sell or retire. This causes a business owner to be less enthusiastic about the business. The vast majority of owners will start to lose focus. They may stop investing the capital necessary to continue the growth of the business. This can trigger other events, such as the loss of key staff members and/or customers. Losing a top customer can accelerate the downward spiral. The failure of the business to maintain its competitive advantage can lead to a more aggressive posture by existing competitors. It may even encourage a new competitor to move into the market.

In time, the owner may realize that they have no choice but to sell if they are to salvage any of the business’s value. The best way to safeguard against this is to sell when the business is doing well. This helps to ensure an optimal price.

One of the smartest moves any business owner can make is to work with a business broker years before selling the business. No small business owner knows what life or the market will bring.


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