Most small-business owners are consumed by the daily challenges of running their business - satisfying customers, managing services and products, tracking finances and suppliers, and personnel scheduling.

It's difficult to project far into the future when it's time to retire or move on to another phase of their life.

Whatever the trigger point, eventually everyone needs to become liquid. Unlike stocks, which have an active marketplace, businesses are illiquid assets you can't sell in an afternoon. Selling a business requires planning and patience.

What are the options for a business owner who wants to cash out?

• Sell to another company or individual. This could be a competitor or someone looking to own their own business.

• Go public. Probably not a viable option because most small businesses are too small.

• Become part of a roll-up. Roll-ups are companies comprising multiple small firms usually in the same industry, like funeral directors. The owners can sell to the roll-up or maintain an ownership position in the roll-up.

• Sell to a family member. This a common practice to transfer to the next generation. It usually involves the seller holding a note and accepting payment over time.

• Liquidate the business. Sell the inventory, buildings, and equipment and customer lists. Because of the emotional elements and valuation issues, this is usually the least attractive, but if no buyers for whole business are imminent, this may be the only option.

It's always best to sell on your own timetable and in a strong market. Unfortunately, this is difficult to do - when things are going well, there is a tendency to ride it out as long as you can.

Just remember that the value of your business is highest when the economy is strong and you are not under the gun to sell.

Ralph Hershberger is president of SCORE Southern Arizona, a nonprofit group that offers free small-business counseling and mentoring by appointment at several locations. For more information, go to, send email to or call 505-3636.