There are a variety of conditions that may indicate that it is a good time to contact a business broker to explore exit strategies. This blog post is part of a series about signs or indicators that it may be time to consider a business sale or exit.
Sign it is time to sell your business #8: risk of unacceptable value loss if unforeseen event occurs
Many business owners have a very large percent of their wealth tied up in the value of their business. As is the case with many types of investments, the closer a person gets to retirement, the greater the risk is that if an unforeseen event causes the business to lose value and marketability that the person may not be able to financially recover prior to when they want to retire. An unforeseen change could be in the form of a competitive threat, new technology, legal problems, a loss of staff, a shift in government regulations, a natural disaster, a significant problem with suppliers, a collapse of distribution channels, etc. In an ideal world, if such a problem occurred a business owner would resolve it and restore any lost value to the business. Yet, doing so can take time – perhaps several years. Consequently, if a business owner would view having such a loss to be unacceptable, it may be an appropriate time to consider a sale to gain liquidity which can then be re-invested in lower-risk, more diversified investments.
