5 Reasons CEOs Want to Sell Their Businesses

For many entrepreneurs, especially those running family businesses, selling a company can mean selling their life’s work. Deciding to sell can be the start of a long process, but, above all, it’s an intensely personal decision with roots that differ from CEO to CEO. Still, there are trends that emerge when considering why CEOs choose to sell. From personal reasons to entrepreneurial flexibility, here are five reasons CEOs decide to sell their businesses.

1. Health Issues

The number one reason CEOs decide to sell their businesses is health. Although the CEO title can conjure images of a glamorous lifestyle to subordinate employees, according to research published in The New Secrets of CEOs, the primary feelings CEOs feel are “frustration, disappointment, irritation and overwhelm.” For many CEOs, these feelings lead to unexpected health scares — scares that ultimately lead to wanting to sell to preserve their well-being.

2. Retirement

Baby boomers, who own 66 percent of businesses with employees in the United States, are rapidly reaching retirement age. As they age out of the workforce, boomer CEOs are increasingly seeking to cash out on businesses they started in their younger years. Retiring CEOs selling their companies has been steadily on the rise since 2009, according to BuyBizSell. The oldest of the baby boomers began turning 65 in 2011, and the rest of the generation is expected to follow suit, year after year, until 2030 at rate of 10,000 people per day. Based on that, we’ll likely be seeing retirements causing sales for a while.

3. High Interest

Sometimes the opportunity to sell comes up unexpectedly, when a buyer makes an offer to CEO who hadn’t yet been planning to sell. This interest can reveal to business owners that there’s high interest for businesses in their companies’ industry. If that’s the case, a CEO may choose to sell in order to capitalize on demand and lock in a high price.

4. Staying on Track

Many entrepreneurs build to sell — launch businesses with the goal selling them within a predetermined time frame. For these CEOs, selling is just a matter of sticking to the plan so they can move on to the next stage of their lives.

5. A New Start

While it’s oft-repeated that more than half of new of businesses fail, things began to change once an entrepreneur has one successful business under her belt. According to research jointly performed by the University of Michigan and Stanford University, 25 percent of new businesses are started by someone who’s started at least one other business. From there, the probability of that business owner starting a third business, and then a fourth, and so on, just keeps increasing. For CEOs bitten by the serial entrepreneurship bug, selling their company frees up time and resources that can be turned to a new project.