Small business is considered the cornerstone of many global economies. Small businesses comprise the largest number of businesses operating in the economy of any given country at every given point.
With the large number of companies falling in this category of businesses in different countries, a significant number of them change ownership each year. There are different reasons why a small business owner may want to sell the business to someone else.
- Retirement – you may want to retire from active business work after running the company for long enough. With that, you will want to get some income out of the business by selling it at a price.
- Death – selling a business may be inevitable in the event that a significant family member passes on. This is especially so if the family member was instrumental in the day to day running of the business. To avoid making losses out of subsequent mismanagement, it would be best to sell the business while it’s still profitable.
- Divorce – separation of married couples frequently forces the sale of a business especially if it was jointly owned.
- Disability – running a business may often become impossible if the owner or key administrator becomes either physically or mentally disabled.
- Financial distress – it often becomes wise to sell a business that frequently makes losses because of any solid reason. It equally becomes an option to change the ownership of a company that no longer has sufficient working capital.
- Desire to exit one venture for the sake of starting another is also another reason for selling your company.
Whatever the case, the process of selling a business is always complex. It involves numerous aspects that majority of successful businesspersons are not exposed to in their day-to-day business operations.
That’s why the services of a business broker will always come in handy. The broker determines the value of your business, then markets its sale within his networks or to other agencies.
The broker also generally controls the flow of information about the sake to prospective buyers, in addition to managing negotiations and executing the closing transaction.
A potential buyer will often have a cash at hand or acquire cash advance from institutions such as FAM, to which they’ll repay the debt after generating profits from running the business.