The 7 reasons to sell your business

I owe everything I have to my mentors. I’m not exaggerating.

I knew nothing when I started my first business over a decade ago. I was (and still am in many ways) a curious beginner at business. Everything from sales, marketing, leadership and management, even finances! 

Thankfully, I have world class mentors.

The thing is, I haven’t met any of them. They don’t even know I exist.

That’s the beauty of the internet - the wisdom and knowledge of the best people in the world is at your fingertips - all for free.

One of my mentors is Brent Beshore of Permanent Equity.

I don’t remember how I stumbled upon Brent, but at times it feels like I’ve stumbled on my generation’s Warren Buffet. Everything I’ve read from Beshore is a return to first principles of business building — building a great business over the long term.

A lot of our thinking and philosophy behind Arbor Permanent Owners is inspired, even copied directly from Brent!

Brent is the best kind of mentor because he’s generous. His annual letters and blog is excellent - thoughtful and full of insight. 

He also wrote a book, The Messy Marketplace. This book is a practical guide for people to demystify the process, and the inevitably emotional journey that is selling their business. If you’re exploring selling your business, I highly recommend you check it out.

Anyway, I was recently asked by a friend, a successful business owner, this question “if you own a great cash flowing business, why on earth would you sell it for a measly 3x to 5x profit!?”

It’s a fair question, because I share the same view. 

And then I remembered that Brent wrote about the seven root motivations for transitioning a company to new ownership. 

They are:

1. Personality/skills: We’re growing faster than I know how to handle.

2. Exhaustion: I’m burnt out and my heart just isn’t in it anymore.

3. Freedom: I’m ready to wake up in the morning and think about something else.

4. Health: If my doctor had it her way, I’d already be retired. 

5. Obligations: I promised my wife at age 65 we could start doing all the things we never had time to do before.

6. Risk: I can’t manage through another major business disruption and need to take some chips off the table.

7. Legacy: I want to make sure that the team I’ve built can continue forward with good support.

Money, of course, is not on this list because as Beshore points out in the book, due to taxes and the power of compounding gains, a business owner will “almost always do better financially…by not selling.” 

He’s right by the way - I wrote about it here.

Back to the seven motivations for selling….

I spent time racking my brain to come up with another root one and I couldn’t. 

So if you have a business, or really any significant obligation or responsibility, and one of those seven things is true of you, now might be the time to consider how to transition out. 

It may cost you, but could also well be worth it.

About Arbor Permanent Owners

Arbor Permanent Owners is a holding company that acquires and invests in exceptional, private businesses, deliberately built for long-term success. Our goal is to be the long-term custodian and permanent home of Great Australian Small and Medium Enterprises (SMMEs).

We are actively looking for businesses with the following characteristics:

• Business Model: B2B industrials: manufacturing and mission critical services

• Business Size: $3 to $6 Million of EBITDA

• Business Profile: Sticky B2B customer base

• Business HQ: Australia

Whether you’re a business owner interested in working with us, or an intermediary with a deal to share, I’d love to hear from you. Please email us at [email protected]