Why do you want to sell your business?
The biggest question you’ll get asked when selling a business is ‘why do you want to sell?
Whilst it is a seemingly simple question if you don’t have a concise and comprehensive answer for your prospective buyer then they may be immediately put off. They often ask this question because they want to understand where you see your future; is it with the business or are you rushing to get out.
Whatever your answer, it speaks volumes about how you feel about the current state and future of your business.
In these situations you should never lie as it will cause problems later down the line, but there is a right and wrong way to approach this question. It is tempting to just give a very direct and honest answer whether it be you want to spend time travelling, with family or embark on a new business venture but there is a way to go about it.
What they want from an answer is that your current situation, whilst helping them realise the potential of your business.
Generally when answering this question you should take your age into account to understand the best way to respond. Here we have compiled some suggested responses based on this;
If you’re under the age of 40, it will be obvious to an acquirer that you aren’t looking to retire anytime soon so it will be important that you communicate to them the benefits you see with merging your businesses together. You won’t want to appear as if you are attempting to abandon a sinking ship so you may want to phrase your answer in the following way;
“Our aim is to take our business to the next level and so we are searching for a partner to increase (sales/reach/capital etc. anything that their business would bring to the table)”
If you are between the age of 40-55 potential acquirers will understand that you are likely looking to create some form of liquidity from your business. In this instance you should think of answering in the following way;
“I am now at a point in my life where I am looking to create some liquidity from my business’ value, but am also am looking for a partner to help bring the business to the next level regarding (insert specific criteria)”
If you are over 55 you are likely to be looking at soon retiring and any acquirer will be mindful of this. With this in mind you should still make sure that you are communicating how much passion, energy and time you have for your business. In this instance you should think of answering in the following way;
As you can imagine I am approaching a stage of my life where I am now thinking about retirement and whilst this is a while off I want to proactive to ensure the future success of my business.
As long as you give a response that is natural. Remember you are trying to convince somebody that you have a genuine reason to sell what you are telling them is a fantastic opportunity!