Why Owners of Profitable Businesses Want to Sell

It’s a very opportune time for business owners to cash out, since

  • They usually acquired the business years ago at a reasonable cost, rode the wave of growth and prosperity, took cash out annually, reduced their debt, and now are positioned to cash out with excellent gain. 
  • And, with the recent tax law changes, including allowing owners to allocate much of the price to "good will" (and low-rate, long term capital gain tax treatment), many owners are choosing to place their businesses on the market, not because there’s anything wrong with the business, but because it’s a good time for the seller to sell. 
  • Another reason owners place good businesses on the market, is because the owners simply want to change their lives. 
  • Some owners wish to retire. 
  • Others have partnerships they wish to dissolve. 
  • Some businesses are sold due to divorces, deaths in the family, or because the owner wants to move to a different climate. 
  • Some wish to cash out and use the money for other purposes. 
  • Some owners are simply not interested in doing the same thing any more, just like some buyers quit good jobs. They want to do something different, with different challenges. 
  • Financing for buyers is available from banks, so owners now can sellout and usually receive all-cash at closing.

Owners sell good businesses for human reasons. It’s rarely because the business isn’t doing well, or for any "sinister" reason. It’s almost always because the owner wants to change his life, or his lifestyle…which is also why buyers sometimes quit good jobs and buy a business.

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