We see this way more often than we should.
A business owner, for any one of a myriad of reasons, decides that the time has come to step away from their role as the owner of their business. Perhaps they’ve decided it’s time to retire, maybe they were hoping to pass the business on to children who have decided to follow another path or perhaps they are in the midst of a personal/family emergency that will require too much of their time and energy to keep the business afloat. The solution they come up with when it comes to their business? Sell some physical assets, lock the doors and walk away.
This is a massive and very costly mistake, and here’s why – existing businesses are worth far more than just the value of the tangible assets because an existing business has cash flow. Cash flow has it’s own value and is a highly sought-after commodity, especially if your business is in a healthy market and has the potential for growth.
Ok, so cash flow has value – but who would want to buy my business?
Lots of people would. Budding entrepreneurs who want a safer bet than starting from scratch, veteran business owners who want a change of pace and are looking for businesses with room to grow, foreign investors who are looking to move to the United States by buying a business – just to name a few.
Think of it this way – someone who wants to own their own business has two options. They can make a very risky and very large monetary investment in an unproven location, with an unproven business model and unproven products and services – or they can buy a business who has already overcome those initial hurdles. A buyer knows your location, business model, products and services work because your doors are open and your books show growth. They get an operating business from day one instead of a risk-filled empty space, and you get a financial return on all you have invested in your business.
If you don’t really have a plan for your exit as the owner of your business, it might be a good idea to talk to a business broker about what options you may have, what kind of timetable you are considering and what businesses like yours have recently sold for. Asking questions now will give you the information you need to make the smart choice – the choice to sell your business when the time is right. Don’t walk away and leave so much on the table, contact us today.
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907