We interact with a lot of business owners who are considering selling their business. We have noticed four consistent issues that continue to surface for sellers of businesses and would like to offer possible solutions.
I love the people who work for me. They are like family. Any buyer will simply gut my business and ruin it’s legacy, right?
Most of the time acquirers of businesses are private equity groups focused on generating the highest near term return. This often involves letting a lot of people go and destroying the legacy you’ve built.
However, this does not have to be the case. There are groups, like Trilogy Investment Group, that sincerely care about your employees and about legacy. Taking care of people is a part of their DNA. Find these groups and sell to them.
What am I going to do if I sell my business? I can only play so much golf…
We see sellers as a tremendous asset. While we hope we are able to add some value or a different perspective by being involved, we recognize your business has become what it is largely due to your influence and expertise. We encourage our sellers to continue to own a portion of the business with us and participate as a board member if they so choose. Stay involved!
Most groups avoid this because it takes a special person and a lot of humility. Removing yourself from the day to day operations and handing your “baby” off to someone is difficult. However, we’ve seen that these relationships work tremendously well long term.
My business is worth more than the buyers are offering. I’m not going to sell.
Holding onto your business is always an option. However, consider a number of alternatives before you give up on the process. As mentioned before, selling a majority of your business at a lower price than you’d ideally want and retaining ownership in the business is a great way to monetize your asset but also stay invested long term. We expect to help take your business to new heights. A little of a lot is often times better than all of something smaller.
We’d also encourage you to consider a percentage of your price to be based on future results of the business. Remember, buyers don’t know as much about the business as you do and many times don’t fully understand the value that is there. If you allow buyers to own the business for a number of years and continue to pay for that investment based on certain performance hurdles, that may be easier for the buyer to swallow.
My kids are involved with the business and I’m not sure what they’d do if we sold.
We are a three generation family business. We fully understand the predicament you are in. We’d be more than happy to help facilitate this conversation with the family members that are involved in the business. Many times we see that these family members are excited about the prospect of transitioning into a different chapter of their life after the sale and the seller simply hasn’t broached the subject with them. Also, we’d love to be helpful in the generational wealth conversation.
We recognize that selling your business is a difficult process. If we can be helpful with that transition in any way, please contact us.