There is a lot of consolidation going on in businesses over the last few years (lots going on in my industry too). It used to be the sellers would go looking for a buyer when they were approaching retirement. Now it is the buyers looking for companies to buy. If you are approached to sell your business, there are a lot of things to consider.
The most obvious thing is getting money up front. With AI emerging, we don’t know what the work landscape will look at in the future and whether your business with be worth the same…or anything…in the future.
Having that lump sum will give you control of your plans for the future. You can pay off your mortgage, set up investment plans for your children, boost your pension, invest for the long term. You are no longer taking the risk that your relatively small business will continue to grow and outperform the growth rate of the largest companies in the world.
You are at the stage of life where you are planning on an exit.
You may not be that employable. Lots of people set up their own business because they aren’t good employees. If you sell, you will have to report to someone, you are no longer the boss. The dynamic of your job may very well change too. You aren’t making the decisions, you have lost control. And if you were bought by a private equity firm, they will want to increase turnover and sell you on.
In losing control, you have to negotiate a salary and pension contributions. You are no longer entitled to the company’s profits.
You are not ready to sell yet. You are confident that your business is growing under your leadership and will continue to do so and you can sell it for even more in the future. You don’t have to take the first offer that comes your way.
Steven Barrett
06 July