Risks in Putting Off Selling Your Business

By Amy Luoma

Risks in Putting Off Selling Your Business

By: Amy Luoma

Does this sound familiar to you?  As a successful entrepreneur, you’ve never been someone who has struggled to make decisions. But when it comes to following through on selling your business, here you are, unable to fully commit.

You have taken your business as far as you can. There are other things you would like to do with the rest of your life while you still have your health. Your partner wants to travel. Although you do take a vacation every year, it’s not the same as really stepping away from all the pressures of the business. It is a weight you’ve carried for many years - even the thought of selling your business relieves some of the tension in your shoulders. You want out.

You've met with a business broker who worked with you to determine your business's most probable selling price. You won’t come away from the sale with as much as you thought, at least not outright. You'll likely need to take back part of the purchase price as a loan to the buyer, which is one aspect you had not thought of. You’ll get a good return on your money, though. And the broker is confident you’ll be able to find the right buyer to look after the staff and customers with the same care you’ve shown them.

You left the meeting feeling good about your decision, and with a date in mind for when your business hits the market. You’ve earned it.

Days later, your best friend, and your accountant and lawyer are urging you to hold off. They remind you of all you’ve put into your business: Don’t you want more? Can’t you do better? How do you know you won’t be left holding the bag? Do you really want to risk all of that? They’ve got you rethinking everything. Now what?

person holding pencil near laptop when selling your business

Should I go or should I stay

Scenarios like this happen all the time. All the right elements for the owner to sell their business are in place, but then emotion takes over and things come to a stop. The attachment to the business or uncertainty about what lies ahead takes over. Even at the point of closing.

Owners need to consider the risks of not completing the sale. The world is always changing, and any of the following can weaken the negotiation position:

  • a market downturn
  • the loss of a key employee
  • a new competitor
  • changes in regulations
  • an economic downturn
  • a change in interest rates
  • a change in occupancy cost
  • equipment breakdown and/or a capital expenditure requirement
  • technological or demographic changes

Poor health or an accident can force a decision when one is least prepared. We see it all too often. The owner has to take prolonged time off and the business suffers in their absence. Before you know it, the company’s best days are behind it. In a worst case scenario the outcome could be closed doors and employees out of work.

Selling Your Business At the Right Time

The time to sell is when the owner is ready, the business is ready and the market is ready. Most wait too long to start thinking about their exit, then end up selling their companies for much less than they could have. If you have reached a point of readiness, don’t risk your largest investment on an uninformed opinion.

Our promise is we’ll do our best to serve your interests, to provide professional guidance, to educate and protect you. When we give you our report of the most probable selling price for your business, we will tell you if you benefit by going to market now. If there are ways you could make your business worth more, we will advise you so as well. But you are in control - it will be your call as to whether selling your business is best for your circumstances.

If you are serious about selling your business, and you want the sale to be managed as expediently, professionally, and profitably as possible, you owe it to yourself to spend some time with a Sunbelt broker.

Contact our office at your convenience to speak with one of our brokers, who will be glad to answer any additional questions you may have. In this private and confidential conversation, we can provide further insights that will help you determine if your business is ready to sell and if your sales expectations are realistic.

The original version of this text for "Risks in Putting off Selling Your Business" was published online on the Sunbelt Canada website.

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