Co-founder and CEO Graham Stephen regularly shares his insights gleaned from discussions with clients and real-world challenges faced by founders and business owners.
If you think your favourite sports team in a world cup can give you an emotional rollercoaster, then you haven’t tried to sell your business yet. After you’ve poured your heart, soul and countless hours into building and nurturing your enterprise, you’re reading this because you’re thinking about letting go.
This is both brave and necessary. Entrepreneurs are great at solving problems, but we haven’t yet solved the conundrum of mortality. At some point, nature is going to require you to let go of the business one way or another. You may as well plan accordingly.
This doesn’t mean that emotions won’t run high when the time comes to sell. This isn’t a quick process, so it’s essential to recognise and embrace the emotions that come with it. Whether it’s the fear of letting go or the excitement of new possibilities (or both), acknowledging these feelings is the first step towards a successful transition.
Doing it alone isn’t smart
By your very nature as an entrepreneur, you’re used to figuring everything out yourself and pulling off miracles in the dark, long before anyone sees you in the light. We get it. Goodness knows we respect it. But in this particular case, it’s time to recognise that just as your customers need your help with a problem, you also need help.
A trusted partner is key, with a remuneration structure that is fair and isn’t based on pressuring you into a transaction. At bizval, we make a living by providing value-added services at every step of the journey, rather than by front-loading you with huge fees or trying to earn a large success fee from a transaction that may not be in your best interest.
In fact, “not doing it alone” is now a theme for you
If you plan to keep doing everything yourself, then your business is officially unsellable. That’s the unfortunate reality. Nobody is going to pay you a sizable sum for the equity so that you can ride off into the sunset and leave them in the lurch as the proud owner of a company, not a working business.
So, how do you know if your business is sellable?
Here’s a very recent example, at least in countries where August is a busy month for provisional tax payments. This is a stressful time not just in terms of cash flow, but also because it puts so much strain on the entrepreneur’s time. If taxes are causing the rest of the business to grind to a halt, then you aren’t independent from the operations and this business can’t function without you.
Let’s face it, sorting out your tax isn’t exactly a fun experience. A far more enjoyable prospect is that of going on holiday, something that very few business owners manage to achieve. This is a key consideration in our valuation process, as it tells you a lot about a business when the owner has managed to get away for a few weeks without the place falling over.
And no, a sneaky Friday off to attend a wedding while keeping an eye on your emails doesn’t count.
If your business only works in the months of the year that don’t include tax deadlines and desperately needed holidays, then you aren’t sellable. Not yet, at least.
This is a journey, not just a destination
The first step, in our view, is a realistic view of what your company is worth. This can be a tough message to receive, which is why we include a personal touch along with all of our valuation service offerings. After all, this is so much more than just a financial asset. Your business is a part of you and there are many emotions involved.
Armed with that information, it’s time to think about what the future holds and what the next steps might be. We offer a listening ear for that discussion, as we ultimately want to see you succeed. If we can be one of the partners you choose along that road, then all the better.
If you are ready to talk about this, then so are we.