Fatigue / Stress
Running a business is much more than a full-time job. Over the years the energy required to handle day-to-day challenges can be enormous. Even when things seem to be well managed, there isn’t an endless supply of energy to deal with daily issues. We have been called many times to sell a business because the owner’s doctor has told them to sell the business in order to reduce the stress in their lives. As owners reach retirement age, it’s normal for them to think about “what’s it all for” and begin to look at other more rewarding activities and where they’ll get the financial resources needed to pursue them.
They are just tired and are ready for a change. It is common for employees to change jobs; business owners sometimes want to change the direction of their careers and switch industries. Even business owners with very profitable businesses want to do something else. We sold a well-run, profitable business for an owner that wanted to be a police officer. He will make significantly less money as a police officer, but that was his dream.
Removing Financial Risk
As people age, they take fewer risks. Most financial advisers will diversify retirement accounts into stable stocks in a variety of industries to minimize the risk to retirement income. Most business owners have a major part of their net worth tied up in their business. The value of the business could be destroyed if something happens to their key employees, the economy, government regulations change, a large customer is lost, new competition emerges or hundreds of other things happen. Savvy business owners will sell the business when the business is performing well.
If a business owner has been in business for more than 5 years, they know the economy runs in cycles. There is typically a recession every 5 years. It stands to reason there will be another economic slowdown in the next few years. Many owners realize the best time to sell is when the business and the economy are trending up. The next recession could be worse than the last one due to mounting government debt and the growing lack of consumer confidence.
Businesses are not run by machines – they’re run by people. We have seen too many families no longer able to enjoy the lifestyle their loved one provided due to the business owner’s untimely exit or major disability. If you are not ready to sell your business now please prepare a contingency plan to protect your family.
The biggest mistake business owners make is waiting too long to sell their businesses. The best time to sell is when the owners and the businesses are both doing well.
Do not be a business owner that receive nothing for all of their hard work!
If now is the time to sell, give us a call at 972-219-6961.