Can You Really Afford to Sell?

It is quite common for small companies to want to sell due to various triggering events, namely a health decline, illness, divorce, partnership issues or even a decline in business. These are fairly understandable and straightforward. A much more difficult reason for sale is simply wanting to retire and enjoy the life. Here is why.

Wanting to retire and live happily ever after sounds like good prospects, but for small businesses it may just not make economic sense. For example, suppose two business owners want to sell their prosperous business that currently yields them 7,000,000M THB annually. Should they sell the company for 42,000,000M THB, living at the same standard would use up their cashed-out money in less than three years. What should they do then?

It is clear that selling a business in this scenario doesn’t produce desirable results and the owners will be better off keeping the company. From their perspective, it is worth more to them than to any outside buyer.

Owners wanting to retire may not put that much new effort into making the business grow anymore and it may start to slide. Another threat comes from a new competitor entering the market. If the owners waited this long and one of the above scenario occurs, they would likely cash out even less money than they would have before.

A possible solution to this tricky situation is bringing in a professional manager. Even though it would cost some money to keep the manager, the final results could be worth it – fewer responsibilities on the owners’ backs and a new fresh blood behind the steering wheel.