This question was posed to me recently by a radio show host. It was interesting because he couldn’t get his arms around the idea that anyone would ever sell a good business. It’s probably why he will never own one.
Kidding aside, it is a valid question. There are lots of reasons. Personally, I like the morbid ones: death, divorce, health issues, and not because I wish anyone harm. Rather, I think those are better motivators to get a deal done.
The one answer sellers give which many people have difficult with is “other business interests”. This reply naturally begs the same question that the radio show host asked me.
It is entirely possible, and common, that some people just get bored with their businesses.
Haven’t you ever been bored with your job? Perhaps a better question would be: “Have you ever had a job you loved?”
I have found that seller’s boredom is usually a result of them putting the business on cruise control for too long. They have lost their passion. They no longer look at their businesses and try to find ways to get bigger, better and faster everyday.
It is certainly a situation that a buyer can use to their advantage.
While you certainly want to dig in to the seller’s reasons for selling, don’t over-analyze the answer. It is far more important for you to focus upon whether or not there is a compelling reason for the sale that could impact the business after you buy it.
Specifically, are there any looming threats such as: pending legislation that could alter the business or, one large customer who will no longer be buying? Is a major competitor moving into the area, or local demographics that can alter the business significantly?
Of course there are many other possible scenarios which you need to investigate. Or, it may simply be the time has come to sell a business.
Skepticism, I believe, is one of the two most important characteristics that a good business buyer possesses. Use it effectively and not to paralyze you from buying a business, but rather to force you to conduct a flawless investigation and analysis.
The other characteristic is perseverance. Navigating your way through the business-buying process will have its ups and downs. It takes time and above all, it takes “know-how”. However, I can promise you that once you get to the finish line, and you own a good business that you can grow, all the nonsense you may have dealt with along the way will be a distant memory.