Is It Time to Sell or Transition Your Business?

By Colmena66, a program of the Puerto Rico Science, Technology, and Research Trust

In Puerto Rico’s entrepreneurial ecosystem, there’s a lot of discussion about starting up, validating ideas, incubating, and launching. But what happens when a company needs to close, sell, or transition its leadership? Are we prepared for that inevitable part of every business cycle?

In Colmena66’s Interactive Status Report of Puerto Rico’s Entrepreneurial Community, published in June 2025, a significant gap was identified: the lack of preparedness for transition and succession processes. Although it may seem like a distant or uncomfortable issue, failing to address it promptly can threaten the continuity of promising businesses, directly affecting jobs, families, and communities.

What does the data reveal?

The findings, although taken from a small subgroup (13 people out of a sample of 777), are revealing and spark an important conversation:

• 38.5% of respondents experienced a process of closure, sale, or succession in 2024.
• 46.2% reported being “not at all or poorly prepared” for this process.
• 38.5% faced emotional challenges, and 23.1% encountered difficulties with negotiation and valuation.
• 25% indicated that “not having sufficient funds” was one of the main reasons for closing, selling, or transitioning.

Although these data are not entirely representative, they do show trends that match real business stories across the island and encourage further investigation into this issue.

When the future depends on adaptation (Skootel’s case study)

Skootel, the first Puerto Rican company to introduce micromobility in Puerto Rico, faced not one but two moments that nearly forced it to close.

One of the most significant events occurred in 2023, when the technology provider supporting their operations went bankrupt. The impact was severe, resulting in the loss of over 1,000 scooters and leaving them without a functional system. Confronted with this challenge, they had two options: shut down or reinvent themselves.

They chose the latter.

They built their technology platform from the ground up. It was a risky and complex move, but a strategic one. As Skootel co-founder Juan Parra said: “Puerto Rico can’t just be a consumer of technology; we can also create it.” Thanks to that decision, Skootel not only managed to continue its operations but is also now stronger, with a solid model tailored to the Puerto Rican market and ready to grow.

Its story reminds us that transition isn’t always seen as planned. Sometimes, it happens suddenly in an emergency.

Why is it important to talk about this topic?

Entrepreneurship is often associated with starting out, but it also demands the ability to plan for the end of a cycle in a healthy, dignified, and strategic manner.

When we DON’T:

• Jobs are abruptly lost.
• Outstanding debts remain unpaid.
• Accumulated knowledge and relationships built are impacted.
• Entire families and communities are impacted by the closure of a business that could have remained open under different circumstances.
• It profoundly affects the emotions, self-esteem, and sense of purpose of the entrepreneur and their team.

The issue isn’t the transition itself; it’s the lack of a clear plan to carry it out effectively.

Solutions for transitioning with purpose

Closing, selling, or transitioning a business shouldn’t be viewed as a failure, but rather as another stage in its life cycle. Here are some strategies and resources that can make a difference:

1. Early Planning

From the beginning of your business, start visualizing different scenarios: What do I need to do now if I want to sell my business in five or twenty years? If I want to retire, when and how should I do it? Having these conversations early allows you to make timely decisions and access the support resources you need.

2. Legal and Financial Advice

Having legal, accounting, and specialized consulting advice now is essential for properly preparing a transition process. These professionals can help you identify gaps, develop financial projections, value the business, review or draft contracts, and create sales agreements that ensure a smooth and sustainable transition.

3. Emotional Readiness

Closing a business is also a human experience. Personal identity is often tied to the entrepreneur’s role. Talking with others who have gone through the same thing, accessing support networks, or seeking emotional support can make the process more bearable.

4. Succession Protocols

Whether family or not, having a succession plan that outlines who will lead the business, under what conditions, and with what preparation is essential for continuity.

5. Access to Capital for Transition

Many businesses fail to transition because they lack sufficient funds to meet their financial obligations, adapt to economic changes, or handle crises and disasters. Assessing financing options that provide adequate support during these critical stages—such as bridge loans, strategic lines of credit, venture capital, or appropriate insurance—can be part of the solution to ensure a smooth transition.

Build and strengthen your relationship with your financial institution now. Having a strong and consistent connection with them makes it easier to access financing at crucial times. Ensure your account manager understands your business, your long-term vision, and your future financial needs.

Keep your finances current and transparent. Updated financial statements, organized tax returns, and a strong personal and business credit score are essential for obtaining capital. This also helps with the succession or sale process.

Worth considering

 In Colmena66’s Interactive Status Report of Puerto Rico’s Entrepreneurial Community, one question continues to be relevant:

How can we ensure that, from the beginning, every business in Puerto Rico has the legal, emotional, and strategic resources necessary to close, sell, or transition effectively?

The answer isn’t simple, but it starts with understanding that transition isn’t the end, only a chance to shape the future.

And as Skootel showed us, sometimes the strongest parts of our business arise from the most difficult moments.

Your experience also provides insight.

To continue identifying gaps like this and developing real solutions for the business community, Colmena66 wants to hear from business owners. This year, the organization renews its commitment to the entrepreneurial ecosystem by gathering the most relevant data through the Annual Entrepreneurship Survey, a key part of the Status Report of Puerto Rico’s Entreprenurial Community.

Those interested in participating have until December 31, 2025, to complete the survey available here.

 

 

Colmena66 is a program of the Puerto Rico Science, Technology, and Research Trust and an affiliate of the national network of ecosystem builders – Sourcelink. Colmena66 connects people who want to start or grow a business with the right resources at the right time. Through its digital platform, you can access a resource directory, business calendar, calls for proposals, and educational content on various topics. Visit www.colmena66.com to explore all available resources.

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