Some recent motivations were typical, like retirement and a health issue. Some other acquisitions came about because of less typical reasons.
One owner got in over his head with other business dealings. Much of this was investing in commercial real estate at the absolute peak of the recent market. When properties are empty and have been for months the bank looks for a way to get their money. In this case he sold his business to pay his other debts.
A similar situation involved personal issues that led to personal financial difficulties. The way to get back on track was to sell the business. Which the owner did to pay the bills.
A couple years ago a client sold their business because they couldn’t get it over a certain threshold yet their personal lifestyle had continued on as if the business was making twice as much money. The result was a sold business to pay personal debt.
If I’m working with an owner, I do not want them in situations like the above. We want the business prepared so we can tell buyers’, “We’re selling as part of our three to five year exit plan and we’ll show you what we’ve done over those years to make the business as good as possible.”
Many studies have shown that companies with a business plan do better than companies without a plan. Just like people who clean, fix and paint their house before a sale get more than those who just put it on the market business owners who prepare their business sell for more money and better terms.
Business plans force companies to have a strategy (and the tactics necessary to implement the strategy). Like the title of one of my talks, “Without an exit strategy you have no strategy” anyone thinking of selling needs to plan it well in advance and be ready for the unexpected. Because in business and life, things happen.