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why do people sell there business?

I'm just curious because there are a lot of scammers out there trying to take good people money.Whats the catch?Why would you sell a successful business?

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Answers (4)
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The BAF Group LLC
MD

It's been a long time, John! As always, well said.

Nov 16, 2014
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would like to throw my two cents in. Owning a business especially like a true mom and pop is not easy and is not glamorous. I own a restaurant. My last true day off was June 27th. My next day off is Christmas (we are closed that day.) The competition is fierce and relentless. It beats you up mentally and physically. We dont get sick days or personal days.
The biggest problem I have are employees. turnover in my industry is by some estimates 120%. I fire a server who is a drug addict and the person I replace her with is even worse, I replace that one with someone even worse. I have some good employees but no leaders. Not one general in the bunch, some of them are great soldiers but no generals. We had a long term great employee who was good but couldn't even answer a simple question like, "Hey I am going to Restaurant Depot, what's the Apple juice situation?" without it sending her into a nervous frenzy that included sidestepping the issue for 20 minutes.
A few weeks ago I left to pick up my kids from school,, get them dinner, take them to karate, went back to paperwork (we were closed by then) and they left puke on the floor. The last table of the day had a 3 year throw up and my employees just left it there on the dining room floor.
Register shortages, not showing up for work, bad decisions (or even worse, no decisions) poor cleaning, poor cooking, ignoring rules and regulations, etc. I could go on and on.
I am very successful but the price I pay is enormous. Most people cant do what I do. I had an MMA fighter work for me once and the guy was tough as nails in the cage but a little baby when it came to hard work in the employment world. He could take a kick to the head but the idea of working hard for 8 hours scared him to death.
Then because I am successful I get the bonus of paying full price for daycare, insurance, etc. because that is my reward for working like a dog and others get high all day, play video games and get new tattoos and get everything for free.
You want my success? You can have it, but only if you have the money, the guts and the work ethic to do it.
And I firmly believe that the best time to sell a biz is when you are successful. Unless you have a ton of money and security to fall back on why would you buy a biz that is not successful??? Doesn't make sense to me.
Business owners (not CEO's who never had to pay for their company ) are a special breed and because of the nature of what we do our shelf life is never known until we are expired.

Nov 14, 2014
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Signal Hill Holdings, LLC
General Partner
CT

The most common reason is some version of retirement. Many owners have been at the business for too many years and experience burnout. Some owners retire at 50 some at 90 so there is no hard and fast rule for when they are ready. If the owner appears too young to sell then there certainly could be lots of other reasons such as life changing events or, just that the owner want to "cash out" which is a way of hedging is bets, in good years, that the company will continue to do well in the future, which isn't always the case.

Nov 9, 2014
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The BAF Group LLC
MD

As a Business Broker, I can tell you that there are any number of legitimate reasons: Retirement, illness, divorce, death, etc. Some people want to move up to a larger business, using the proceeds of the businesses they sell to leverage against the larger one. Some people buy or start too many businesses and, when one takes off, they have to sell one to concentrate on the entity they believe gives them better, long term profitability, more enjoyment, or just to back off and enjoy life more. There are undoubtedly some businesses where the Seller decides that he/she has seen the best of times, and wants to cash out now. That does not mean the business is doomed; it simply may be that it has seen its years of greatest growth.

Sometimes, the business Owner may foresee the business eroding in time, because of technology, changes in competition, changes in tastes by his Customers. Many years ago, a couple of guys wanted me to sell their string of Pay Phones. It had been making a ton of money for them over the years, but in doing some research, I realized that a new concept - the mobile phone - was about to trounce that business. I did not list their company, for obvious reasons.

As a potential Buyer, you have to do your research on all of the issues that could come into play. Although most Sellers have understandable reasons for selling their businesses, it is wise to be skeptical. There may be negative issues out there they even the current Owners do not know about or understand.

Nov 3, 2014