Professional success can be addictive. While that ‘addiction’ has probably been a pivotal factor in you becoming the accomplished entrepreneur you are today – with the prosperous company to prove it – it can mean you become blinkered to the bigger picture and you might miss the signs that it’s time to sell a business.
The ‘bigger picture’ looks different for everyone. For those early on in their career, it might mean moving onwards and upwards towards a more challenging business opportunity elsewhere. Maybe you’ve taken this particular venture as far as you set out to. The more experienced business owners amongst you might be thinking about cashing in a lifetime of hard work so you can retire and spend more time with family. Others might feel money rich but time poor, just craving more time for themselves with less of the daily demands that can go hand-in-hand with running a thriving enterprise.
Winner takes all
Entrepreneur’s Hub Director, Malcolm Murray, recalls a conversation he had a few years ago with a business owner who was coming to the realisation that it was the right time to sell his business.
“He said there were two signals that highlighted to him that it was time to sell – the first being he couldn’t switch off from his business, even when he was on holiday. Time off is a key part of sustained productivity, not to mention good health. But he said what really showed it to him was something his wife said – “you need to know when you’ve won”.”
What she meant by that is that he had accumulated significant financial assets for his family, the business was going well… yet he would keep chasing the next thing, and the next, and the next if he let his addiction to achieving more and more take over. Now was the time for him to step back, acknowledge the fruits of his labour and do other things with his life.
Your raison d’être = their reason for buying
A consistently strong turnover, flourishing profits and a productive workforce with desirable skills are all feathers in the cap of the ardent entrepreneur. As a business owner, you want to leave your workplace at the end of each day with the satisfaction that your business exemplifies all these features. It’s not just a valuable asset and what you DO, sometimes it feels as if it’s who you ARE – for many entrepreneurs, their business success becomes part of the fabric of their identity
So, it’s understandable how difficult it might feel to walk away from that.
Quit while you’re ahead
Don’t be blinded by your own success: the same aspects that fuel you to keep going with your business are what potential buyers are looking for. Your reasons for getting out of bed each day are highly desirable selling points to them.
Being able to market your business for sale and advertise positive aspects such as keen customers, healthy figures and happy, talented staff will create a very attractive buyer proposition and allow you to command a higher price.
Become so dazed with the headiness of your career triumphs and you risk hanging on to your business too long, by which point those assets might have lost some of their worth.
How do you know you’ve ‘won’?
It can be tricky to get perspective on your own situation, so here are some questions you can ask yourself to assess where you might be in terms of your appeal to potential acquirers right now:
- Does turnover demonstrate steady year-on-year growth? An upward line on the graph is a green flag to any buyer.
- What does your workforce look like? A blend of seasoned experts and new talent with fresh ideas proves strong staff retention and attractiveness to the best young candidates in the field.
- Are you setting trends? A new product, in-demand service and/or a renowned brand with a resonant message will be recognised by acquirers at forefront of your industry – those prepared to pay a premium for such a strategic investment.
- Is there a gap in the overseas market for your offering? Even if you feel like a small fish in a big pond here in the UK, you could become the market leader in another country where the industry is less established, so consider your global appeal.
- How exit ready are you? If your business is as organised as it’s successful, savvy acquirers will be hooked by the prospect of compliant and orderly documents such as contracts and leases. A lack of preparedness will give the impression of chaos behind the scenes – which is rather less appealing and could even devalue your business.