Franchise Clearly

When you’re ready to sell your business, the first question you’ll be asked by everyone you tell is “why are you selling?” Here’s why it’s important to think about your answer carefully.

As an owner, you play an important part in the marketing process. Whether you’re casually mentioning your plans to other franchisees or friends, or reaching out to a business broker for the first time, your reason for selling will be the first impression anyone forms of your business. Your reasons are probably very personal and specific, but how you phrase them to others gives them an idea, not just of where you stand, but also where the business stands.

For instance, “I’m just tired and burned out” might tell people that the business is hard to run, not profitable enough to be worthwhile, or in trouble. “I’m just ready to get out of the business” can imply the same. Retirement is understandable, but it also can give the impression that you and the business have no more gas in the tank.

If you’re young and not close to retirement, your “why” is even more important. Why would you leave a profitable, lucrative business? The assumption is probably that it’s not as profitable and thriving as it looks. Your reasoning and how you talk about it will be critical in establishing trust in a potential buyer. Without trust in your motives and your honesty, the deal can easily fall through.

So thinking like a marketer/business broker is helpful here. You’ll want to be transparent and authentic, but you’ll also want to position the business as a great opportunity for someone new. Annette Simmons is the author of Whoever Tells the Best Story Wins: How to Use Your Own Stories to Communicate with Power and Impact. Her book is intended to help you get into “story thinking,” using stories as tools to bring emotion back into the decision-making process. And although selling or buying a business is always a financial decision, there’s plenty of emotion involved as well.

Simmons says one of the most powerful stories you can tell is the “why I’m here” story. In this context, you might start out by saying why you got into the business in the first place. “I wanted to be my own boss within a system that had a proven track record of success, so this franchise was a great fit. I wanted to run a neighborhood service where I could get to know my customers – and make a great living. Now, after 20 years, I’m ready to take some time off to consider what’s next for my career and my family.”

Sounds better than “I’m just done,” doesn’t it?

You can also talk about leaving while there’s still plenty of potential for the business to grow. “I know there’s room for growth and improvement, but I’m ready to let someone new take that on. I’m looking for the right buyer with the vision and energy to make the next few years even more profitable.”

The scenario you set with your answer will help potential buyers create a vision for where they’ll see themselves in five to ten years. Burned out and exhausted, or growing a business that provides a vital service to their neighborhood while making a good living.

The question of “why do you want to sell your business” is very much like the first question you ask when you’re trying to hire good help: “Why do you want to work here?” What buyers are really asking is “why do I want to buy this business from you?” Your answer can make or break the deal.

The first step is to understand what your business might be worth. We have a complimentary tool that can get you started. Click here.