Answers to “Why Do You Want To Sell Your Company?”


Many business owners believe to sell your company is similar to passing the baton in a 400 meter relay. In other words, once you’re finished running, you get to relax.  In reality, buyers will insist that you stay on for a transition period. The period can last anywhere from six months to five years. During this time you will continue to work in your business. This helps the buyer capitalize on the investment they’re making.

Everybody wants to know why you are selling your company.

At some point in the process of selling your business, a prospective buyer will ask you – oftentimes casually – “Why do you want to sell your business?” These eight seemingly innocuous words have derailed more deals than any others. 

Buyers ask THE question to evaluate how likely and willing you are to stay on or if you already have one foot out the door. 

Obviously you don’t want to lie, but there is a right and wrong way to answer THE question. Answers like “I want to slow down a bit” or “I want to travel” or “we’ve got a baby on the way and I want to spend more time at home” communicate to a potential buyer that you plan on winding down when they take over. However, what they want to hear is your intention to help them realize the potential locked inside your business. 

Responses to “Why do you want to sell your company” based on your age. 

  • Under 40If you’re under 40, you clearly aren’t ready to “retire.” You need to communicate that you see an upside in merging your business with theirs: “In order for us to get to the next level, we need to find a partner with more <insert sales people, distribution, geographic reach, capital or whatever the partner brings to the table>.”
  • If you’re between 40-55 years old, most people will understand the need to shore up your personal balance sheet: “I’ve reached a time in my life where I want to create some liquidity from the value I’ve created so far, and at the same time I want to find a partner who can help us get to the next level.”
  • If you’re over 55, you can start to talk about retirement. Be sure you communicate that you still have lots of energy and passion for your business. “I’m at a stage where I need to start thinking about retirement. It’s a long way off yet, but I want to be proactive.”

Rehearse your answer to THE question so it becomes a natural response. Follow this advice and you’ll be ready when you are inevitably asked THE question by a potential acquirer.