All businesses should be for sale. The business has been created to produce profits. One way of making a large profit might be to sell out. There is a tendency to become so attached to a business that selling opportunities are passed by in order to protect what the originator has developed. It makes little sense to pass up a huge profit because the owner enjoys operating the business. Ir that is the case, the owner should sell out and take a percentage of the profit and open a new business. Many entrepreneurs have achieved great financial strenght by selling out and then starting anew, repeatedly.
Business are sometimes purchased because it is the only way to successfully enter the market. If a particular business dominates the market due to superior location and reputation, buying it might be the only method of assuring success. Other reason to buy the existing business might include:
- The business suppliers will already have been established, saving the time necessary to find them
- The necessary equipment will be on hand
- The hardwork of physically setting up the business will have been done
- Experienced employees will already be on hand and will not require training
- There will be less planning required
There are key times in business’s life cycle when it has achieved its greatest market value. Passing by opportunities to sell at the key times is hazardous as there is no certainty they will return. This is particularly true as the entrepreneur gets older. There have been many instances of business owner who have refused to sell because of unfounded optimism for the future. They turn down the opportunity. The future brings decline and the business loses its value, leaving them with nothing.
For more information about business’s life cycle, you can find in this related post: Business Life Cycle
The time to sell a business will vary depending on the industry and product itself. If the product is predicted to have a short life cycle, it should be sold midway through the growth stage. A more stable operation with a longer lifeline might reach its highest value midway into its maturity stage.