Most entrepreneurs love their businesses and are often submersed in running them and achieving amazing results. The thrill of making things happen is often an important reason why the entrepreneur sets up their own business in the first place, plus they like the fact that they are creating something worthwhile that has real value on exit.
At some point, maybe planned from the outset, or perhaps when the owner is thinking about other things, they may wish to pass their business on via a sale as a going concern or perhaps a management buyout.
Often the owner is disappointed that their business is difficult to market and prospective purchasers / managers show little interest in taking it over.
The most common reason why this is the case is due to the over involvement of the owner in the business at the time. Without the owner’s involvement, the business is likely to fail, but the owner wants to sell the business and do something else – so stalemate!
In this context there are two types of owner / manager:-
Hands on owners
If you really cannot “let go”, or have tried before and it has failed, then a trade sale as a going concern or management buyout will probably not happen, or if it does, the sale price is likely to be low and the future business more likely to fail.
You may still get a good price for the business if it is consolidated into the purchaser’s, but this will often involve a loss of identity, relocation and staff redundancies which some owners will feel is unacceptable.
Your business is unique and so is your culture. You will need to invest in your people and identify talents at an early stage. You will need to think about your key skills and pass these onto a team of managers / Directors. Not only that, you will need to appoint the new leader of the company as well as leaving them all unaided at some point to confirm that your plan has worked.
Once there, the company can be marketed or bought out by the management, and providing the income streams and profits are consistent and the management team settled, your company can then achieve its full potential, and you have achieved your goal as well.