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Why the Reason a Business Owner Is Selling Matters to a New Business Owner

The reasons behind what motivates a business owner to decide to sell can be as varied and diverse as the ones that lead someone to put their home up for sale. While the decision can be very personal and there's no obligation to disclose the reason the business owner is selling, it can have some important significance to the new business owner.

In much the same way that a potential new homeowner would be interested in finding out if the seller is moving because they've outgrown the house or if it’s because it was built on swampland and is now slowly sinking, the prospective buyer of a business would want to know if the owner has decided to sell for personal reasons or if it's because of something in the business or in the marketplace that is for-sale.jpgprompting them to divest themselves of it.

It's impossible to compile a complete and comprehensive list of all the possible reasons that might compel a business owner to sell, but we can examine a few of the most common ones. The seller of the business you are considering will probably volunteer the reason they have decided to sell. When doing your due diligence, you can decide if the stated reason still rings true or if one of these possible reasons seems more likely.

Possible Reason The Business Owner Is Selling #1: Retirement

Owning and running a business is an act of passion for many people. It's what they love to do and hardly feels like work. Nevertheless, a time may come when they are either no longer physically capable of putting in the hours with the same kind of energy, or they simply choose it's time to hang their hat and hand the reins over to someone else. For many business owners, the company they have built represents a significant portion of their investments and assets. Therefore, the revenue from the sale of the business will be a welcome supplement to their retirement income.

Possible Reason The Business Owner Is Selling #2: Illness or Family Concerns

If a business owner or one of their loved ones is injured or diagnosed with a serious illness, running the business may become too much of a burden or of secondary importance, prompting them to put the business on the market.

If the business is owned by a married couple that is going through a divorce, selling it may be required as part of the settlement.

Reasons such as these should not too concerning if you want to buy a business unless growing acrimony between a married couple or the illness has negatively affected the business’ performance in the months leading up to the sale.

Possible Reason The Business Owner Is Selling #3: Burnout or Fatigue

Running a business can be stressful to some. Dealing with customers, negotiating with vendors, and managing the day-to-day routine can eventually become tiresome and lead an owner to decide to sell.

Some types of companies, like landscaping or construction, are also physically very demanding if the owner is also a worker in the business. Years of that kind of strenuous work can take a toll, and the owner may have decided that it's time for a break from it.

Possible Reason The Business Owner Is Selling #4: Lack of Vision and Inflexibility

When a person has spent years running a business a certain way, it's understandable that they might adopt an attitude that says, "this is how we've always done it, and it's how we're going to keep on doing it." While there may be a certain kind of comfort that comes from sticking with the familiar, a blind devotion to the status quo can eventually jeopardize the company if it will not adapt in the face of changing technology and consumer habits. Confronted by such circumstances, a business owner may prefer to sell rather than to change how the company operates.

Possible Reason The Business Owner Is Selling #5: Increasing Competition

Unless you’ve found a company that enjoys a monopoly in the marketplace, competition will forever be a reality that you must be aware of. However, if the competition is becoming fiercer and other companies are gaining a greater advantage, it may lead a business owner to decide to sell before it’s too late. That's why it's so important to do your due diligence when you're looking to buy a business and clearly understand the competitive landscape.

If you're looking to buy a business in Minnesota, be sure to browse through the businesses for sale in our current listings.

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Our Sellers except us to achieve the highest and best offer for their business while taking the least amount of their time away from it as possible. That is because the absolute best use of their time is to continue to run and grow the company.  If revenue or profits begin to decline, buyers will walk away or decrease their offer. Transworld's philosophy can be summed up in a ten step, how-to strategy that culminates with the sale of a company. This proven method has been used to sell hundreds of businesses.  Here are the steps. Step1 Comprehensive Business Analysis and Feedback As your business broker, the first thing in our how-to strategy is to analyze your operation, finances, market potential and industry trends. We take that information and advise you on steps to prepare your business for sale, and  generate a business profile that represents your company in the most attractive way possible. Step2 Sale Structure We identify the best possible price range to sell your company. This is based on solid facts, the condition of the market, projected growth, sales potential and the sale of similar businesses within your industry. Transworld’s experts apply sophisticated, time-proven valuation techniques to ensure that your price is appropriate for the current market condition. The price must not be too high or too low. Yet, it must represent an attractive investment potential for the buyer. Step3 Confidentially Network The Business For Sale During the selling process, we utilize the latest technology to present your company to other business brokers and strategic buyers all over the world. This greatly multiplies the effort in your favor. With Transworld Business Advisors, you have literally thousands of industry professionals confidentially representing your company to buyers.   Step4 Confidentially Advertise To Buyers Our aggressive marketing program ensures your confidentiality and provides maximum exposure for your company. Your listing is placed in various industry databases, Internet sites, and publications which are constantly updated. We spend more money in advertising and marketing for buyers than anyone else in our industry. Step5 Control The Information Flow We organize all necessary documentation and release information only as needed. We use limited information when advertising to maintain confidentiality. Buyers are pre-qualified and required to execute a confidentiality agreement before receiving any sensitive business information. Step6 Create Competition For Your Company We attract thousands of buyers, creating competition for your business. Buyers are qualified for financial ability to meet the offer, and we engage you with only the most qualified buyers. Once you meet the best of the buyers, we urge them to prepare and present all offers. We can continue to engage potential buyers on your behalf as negotiation on an offer is in process and have another interested party ready to go should a buyer change their mind. Step7 We Negotiate For You To Achieve The Best Price Appropriate negotiation is crucial to achieving your best price and terms. We have the expertise to establish sound and resourceful negotiating techniques on your behalf. Transworld has trained all of its agents in the art of negotiating through curriculum that we have created specifically for our industry. Never negotiate without planning, expertise, or from a position of weakness. Step8 We Provide Exceptional Support To You Through The Due Diligence Process We take pride in our exceptional service. Only half of the job is finding the right buyer who will pay your price and meet your terms. The other half is getting that buyer to the closing table. We quarterback the deal, work with the accountants, lawyers, banks, landlords, and other third parties that could jeopardize the success of the transaction. We realize that you depend on us to guide you through the sale of your business. We make the transition simple and easy for you. We know when an opportunity for you may arise and are always there to take advantage of it. We also know when someone is trying to kill your deal or is being unreasonable and how to handle those situations. Step9 We Are There From Beginning To The Closing We help manage all administrative procedures, licenses, inventory counts and lease assignments that may be required. Transworld works closely with your advisors to ensure a smooth transition. Using the latest technology, we strive to be ready to work on your behalf to get the deal done! Step10 We Are There For The Transitional Phase And Beyond! Because we are in the business community, you may want to consult us from time to time after the sale. We will provide you with the assistance after closing. Transworld will always remain in your corner! Schedule Consultation Now

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