When you hear about successful people selling their brand or venture, some have the impression that their businesses have gone bankrupt. That is one strong reason for doing so. But in the world of business, the acts of selling and buying a business are just a constant. These actions are among the things that make the business world go round.
Basically, some businesspeople are motivated to build a legacy, meaning an enduring business, which they can leave to their children and grandchildren. However, some just look at it through a very transactional lens: they build a business, sell it, and then move on. But what exactly are the common reasons businesspeople put their ventures on the market?
Seasoned entrepreneurs and business lawyers may agree on the following:
Burnout and Boredom
Being a businessperson is indeed exciting. You call your own shots, and you can work at your own pace. But eventually, you may feel exhausted and burnt out. Some people who have reached a certain level of success may feel bored with what they’re doing anymore. These may seem like pretty common reasons, but for entrepreneurs who have been working on their venture for a pretty long time, they should be more than enough to give up their businesses.
New and Exciting Opportunities
Sometimes, a business owner may stumble upon an offer that they cannot refuse. Case in point, some businesses are bought by larger corporations at a very hefty price and a promise of retaining the leadership post. But some business people sell their brand to a competitor or a holding corporation because they want to start a new company or venture; their role in the current company actually holds them back to fully commit to that plan, and the only choice left is to sell their business. Sometimes, the proceeds of the sale may be reinvested in the new venture that they will start.
Business partnerships are often founded on mutual goals, philosophies, and hope. But there will come a time when partners do not agree on a lot of things. If this persists, the dynamics of the partnership will be compromised, leading to more disputes with no resolutions in sight. If the business’ internal rules and contracts permit the dissolution of the partnership through selling the company, the partners may agree to give up the business no matter how good the figures are.
Industry and Global Changes
Businesses are bound by industry rules and government regulations. And if any of these have shifted, the operations of a company will be affected. Other reasons also include wars, government-mandated shutdowns, pandemics, restrictions on local trades, and high taxes that may make a businessperson give up his company.
Planning to sell?
Businesspeople have a lot of reasons for selling their start-ups and corporations. If you are planning to sell yours, know that this involves a lot of procedures — from thorough corporate assessment to comply with legal requirements. Nevertheless, it is also important to seek the help of a business lawyer to make sure that the process will be smooth.