Common reasons to sell
1. Retirement - Retirement is one of the top reasons business owners decide to sell their business.
2. Let someone else take the company to the next level - Some owners choose to sell because the've determined that they've taken the business as far as they can take it.
3. Divesting a division or product line - An owner doesn't have to sell the entire company, selling a division or a product line is a very common M&A activity. Some of the reasons to divert a division is:
- A bad acquisition
- An over leveraged buyer
- A money losing division
- A lack of synergy
4. The industry is changing - the decision to sell a company in the face of a changing competitive landscape is often a very smart move.
5. Needing capital for growth - a growing company often needs more cash than it can generate from operations.
- Control investment, the investor has control of the company, a venture capital or private equity invests money in exchange for stock in the company.
- Non-control investment, a minority equity investment.
Steps to get ready to sell
- Clean up the balance sheets
- Collect your receivables
- Make sure inventory is all saleable
- Pay off debt - the long term debt of the business is sellers obligation.
- Address legal issues
- Increase sales