Why You Should Sell Your Business Instead of Closing It

Businesses are built with love and labor. Entrepreneurs spend years developing it from an unknown brand into a reputed entity that generates significant revenue. They are emotionally connected to the organization and do everything to make it successful. From sleepless nights in the office to bootstrapping and borrowing money from friends and family to stay afloat, business owners put their hearts and souls into their ventures. Sometimes, they are able to reap the rewards, and sometimes, they fail to get the desired output. The pressure of debts and looming bankruptcy makes them shut down.

According to reports, 21% of new businesses close every year, showcasing a high failure rate. It has been estimated that close to 48% fail in the first five years, while 65.3% of businesses fail within ten years of their establishment. It can be extremely painful to walk away from the entity after investing a long time in its growth. It makes more sense to sell the business and generate a return on investment instead of losing everything. Here is why this selling is better than shutting down.

1. Sell Your Business For Profit

The most significant advantage of selling a business is that you can gain back some investment rather than getting nothing out of it. The outgoing owner can increase the ROI by revamping the entity before putting up the business for sale in Las Vegas. It will help attract buyers who want to acquire undervalued entities with high potential. Many business owners use mergers and acquisitions to expand their capabilities. Thus, even a loss-making business can find buyers and generate some value for the owner.

The amount received from the sale can be used to repay personal debts and start afresh. Entrepreneurs must realize that liquidation does not generate the same amount of value as selling a business. If the failure of the business was because of unexpected reasons like the inability to pivot due to technological disruption, it could still be viable. The new owner can use the workforce and customer base to revamp the entity and deliver optimized results.

2. The Brand Name Will Survive

Starting and watching a business grow is like a dream come true for most individuals. Witnessing the same venture sink can be financially distressing and heartbreaking for the owner who puts a lot of hard work and emotion into the business. It can pull them into depression and take away their enthusiasm and zeal to perform. It can make them feel like a failure when the business is closed. They may lose self-confidence and appear shattered because of the loss.

However, they do not lose hope if they sell the business as a going concern. The outgoing owner feels content that his brand continues to thrive and will regain its lost glory under a new leader. They feel vindicated and find solace in their idea's potential that needed some tweaking to become a market leader.

3. Use the Sale Amount for A New Career

Anyone who has been an entrepreneur may not find it easy to go back to the corporate job routine. They want to be in a position where they can call the shots and be their own bosses. If they close their business, they have very few choices left in terms of professional opportunities. However, if they put up their business for sale in Vegas, they can use the sale amount to start a new venture.

They know the mistakes they made the first time and will be more careful with the new company. They can start something small that can be run from home or needs just a virtual storefront. There are many businesses that can be started with minimal investment, such as e-commerce, commercial cleaning, landscaping, aged care, pet grooming, food truck, catering, etc. They can make a new beginning with the returns generated from their previous venture.

4. Maintain Your Stake in the Business

Entrepreneurs who have to sell their businesses for certain reasons can retain some control in the organization by retaining a few shares. Keeping a stake after selling the entity involves giving up most of the ownership control and retaining a small percentage to offer advice and guidance. Some buyers may prefer this because they get ongoing support and mentoring from the founder. It allows them to transition smoothly into the leadership role.

It allows the outgoing owner to stay involved in the business and provide valuable input to prevent mistakes that led to problems earlier. It is also financially beneficial for the stakeholder since they can earn from their shares in the future when the entity becomes profitable.

5. Closing Is More Complex Than Selling

Closing a business is far more challenging than putting up a Las Vegas business for sale. The owner has to file returns and other forms depending on the business type (LLC, partnership, corporation, or sole proprietorship). The employees must be paid their final wages and other due compensations. The owner must file the employment and other taxes owed by the business.

The payments made to contract employees in the year of closing the business must be reported to the Internal Revenue Service. In addition, the business owner must cancel the employer identification number and IRS business account. They are also required to maintain certain records for a specific period after the closing.

6. Use the Money to Retire Comfortably

The amount earned from the deal can help the outgoing owner to retire peacefully. If they have pursued their passion and contributed to the entity effectively without any desire to continue to work, they can hang up their boots. Selling the business ensures that they retire without regrets and enjoy their time with family, which may have been limited in the past.

Most entrepreneurs struggle due to a lack of work-life balance. Selling their business gives them ample time with family without worrying about income for some time. They can invest the sale amount in stocks and other assets to generate ongoing income and enjoy a comfortable retired life.

Wrapping Up

Selling a business is more beneficial than closing it because the brand can continue to progress under a new owner. The outgoing owner can make a return on investment and utilize it to build a new career with the knowledge needed to succeed.