If a business is truly successful, why would the owner ever sell it?
To someone that doesn’t necessarily understand business or has never built one, running a profitable, successful business is an amazing position to be in.
That’s why it’s almost impossible to comprehend why someone with a successful business would ever consider selling it.
However, there are quite a few, legitimate reasons why someone would want to sell a profitable business.
In fact, every single business owner will, at some point, consider selling off their hard work to an investor.
Here are some of the best reasons we’ve seen to give up your successful business and let an investor take over.
Reason #1: To pursue new projects
As an entrepreneur, the pursuit of growth and hitting the next level is what drives you.
Sometimes, hitting the next level requires you to start from scratch on a new business venture or project.
If you’ve come to this point in your life or if there is a new opportunity that’s going to require your undivided attention, you may decide to sell your existing business.
Selling off your existing business can provide much needed cash to get your venture off the ground. It can also leave you with the energy and focus you need to grow your new opportunity.
Reason #2: Because you’re burnt out
At a certain point, some entrepreneurs and business owners will hit a brick wall; unable to be productive anymore.
This is especially true in competitive industries, where business owners put in 60 to 80 hour work weeks over several years.
Once they get to this point, it’s nearly impossible for them to be creative. The passion they once had for their business has dwindled away.
Continuing to push forward past the burn out stages never works, and only leads to further burn out.
Cashing out allows business owners to regain their composure and creativity, while building up their energy levels to start focusing on their next move.
Reason #3: To enter into retirement
After a long and profitable career, many entrepreneurs find themselves in the enviable position of being able to comfortably retire. Business owners in this position will be looking to sell their business to an investor so that they can begin enjoying their golden years.
But wouldn’t retirees want to retain ownership of their business as a way to secure an income stream?
No; maintaining the business as they enter into retirement is going to be the exact opposite of their goals.
People getting close to retirement often want to relax and enjoy the payoff from years of hard work. They no longer wish to put in the hard work to grow the business and manage their employees.
By selling the business, entrepreneurs can invest their cash in other ways that are more hands-off and automated.
Reason #4: To quickly cash out
Many entrepreneurs prefer building a business to maintaining a business, and will set out to cash out one day.
Their ultimate goal from the beginning would be to hit a certain revenue level or number of customers. Once this has been accomplished, they can find an investor who is willing to buy their business so they can move on to other ventures.
Reason #5: Because of a divorce
It’s a sad state of affairs, but sometimes entrepreneurs will find themselves going through a divorce or separation that requires strategic moves.
In many divorces, assets are split down the middle and this typically includes any businesses the entrepreneur owns.
To help make the divorce process move forward as smoothly as possible, entrepreneurs will sell their businesses to an investor and split the total profits with their ex-spouse. This way they can avoid working with their ex-spouse any longer without risking something they have worked hard for.
Reason #6: Dealing with health issues
An unfortunate reason for selling a business is major health issue; this could be either with the business owner themselves or someone in their family.
The entrepreneur may not have the funds needed to pay for the actual treatment or they may not be able to dedicate the time to the business anymore. Operating a business under these circumstances can lead to distractions.
There are far more important things in life than continuing to operate a business, especially when medical issues arise.
In cases like these, selling the business makes more sense.
The reasons listed above are some common examples of why entrepreneurs tend to sell their online businesses.
If you currently own a successful and profitable business and have found yourself in one of the situations above, you may want to work with a broker to help you get your business sold.
They can get you in touch with the savvy investors that know what your business is really worth. They work with you to get the maximum value from the sale so you can move onto the next stage of your life.
Author: Jock Purtle
Jock is the founder of Digital Exits, an online brokerage service. Jock has been featured in Forbes and contributed to numerous websites and podcasts. He specializes in appraising and buying/selling online businesses and enjoys helping other entrepreneurs do business online.