Should You Sell Your Franchise Business or Keep It? How to Decide.
Have you thought about selling your franchise business? Sometimes, business owners want to hold on to their business so they can accumulate more dividends. What they don’t know, however, is that there are some risks to consider before doing so. Keep reading to learn more about these risks.
Risking it
There might be a benefit to holding on to your franchise business for personal profit, but you should also take the following risks into consideration:
- The risk. Knowing that you retain all of the risk is the biggest downfall of holding on to your business. Keep in mind: Economic cycles go in different directions – and while business might be going great today, your industry could be in for some hard times in the future.
- Breathing room. Being a business owner will always occupy a huge chunk of your time and energy when it comes to your personal life. Of course, you can go on family vacations or go golfing, but as long as you’re a business owner, the background hum of what’s going on with your company will always be on your mind. If you lose money, you can always get it back – but if you lose time, it’s gone. What do you want?
- Profit. Some owners argue that keeping your business would allow you to get profit from dividends in the upcoming years. But think of it this way: If you have to buy replacement equipment, finance your customers, or stock inventory, most of your earnings will be tied up in taking care of your franchise business. The amount of cash you’d be putting into your business every year wouldn’t even be worth what you’re trying to make a profit on in the long run.
- Tax dollars. No matter how your franchise business is set up when it comes to taxes, selling may be a better outcome for you than income you would get by paying yourself by holding on to your business for a little longer.
- You deserve the best. Some owners think they can’t get better than the market’s going rate for their business. You might be surprised to find out that you’re able to get a higher offer than you think.
Determining whether or not to sell your franchise business is a big decision, and there things to take into consideration. That’s why we have professional business brokers at Franchise Sales who are here to help you make the best, most informed decision. Get in touch with us for more details.