Selling a business - your experience / recommendations?
Discussion
I run a small business in a specialist sector that I've been running for around 10 years. Its successful and highly profitable, with reasonable barriers to entry (investment) but its a small niche industry without any real reason for a larger competitor to buy us out. At the same time, its been very hard to find good managers in the past who know enough about the industry to be effective and we've gone through a few over the years. I cant afford to pay more money for better talent while keeping it anywhere near as profitable and there would still be things the manager couldnt do that require someone fully invested to care enough about doing right (its not a simple business in many respects). I used to love running it but its grown tiresome and tedious - its the longest I've done anything and I'm simply ready for a new challenge - its growing as it stands still with me running it, but could do even better with a fresh owner. At this point, I have lots of money but no freedom - I'm "time poor" and I'm more acutely aware now than ever that the time is more valuable. Each day that goes by its sheer frustration because I have plenty of money to take time off and then start something new with my full attention, but I cant let it die and leave it without a captain. I cant even take several weeks off currently as they need me there to keep them on point otherwise it unravel. I delegate plenty (before this is suggested - which is easy to suggest if youre reading a textbook but in practical terms even those at the height of their game are needed to lead their troops) but my leadership is vital to keeping the details spot on otherwise it starts to be less profitable.
At this point therefore I'm fed up. I've built something successful but I'm stuck with it and while I'm fully aware that it could be worse and I do have something I could continue to make a good living from, every day is tedious and I've had enough. I'd sell it for *under* market value simply to get my life back before I burn out. However, the company I'm dealing with for business sales (the only reputable one I can find) wants to wait several months to see further records of growth this year and it means waiting 6 months. I just cant bear it anymore and I've fully learnt my lesson on "having the end game in sight" for next time!
I know this is limited information to go on (and obviously I havent made anything public here) but net assets of the business are many hundreds of thousands of pounds (but not millions). Can anyone suggest any other routes to sale I may not have thought of? I've been tempted just to liquidate it but I reckon it'll take just as long to sell through our assets etc and its not really the fitting end to 10 years that I'd prefer along with keeping jobs for the staff.
Any advice/suggestions appreciated. Similarly, if you were in a similar position a few years ago, got out and havent looked back - your story would be words of comfort to me at this stage! Robin.
At this point therefore I'm fed up. I've built something successful but I'm stuck with it and while I'm fully aware that it could be worse and I do have something I could continue to make a good living from, every day is tedious and I've had enough. I'd sell it for *under* market value simply to get my life back before I burn out. However, the company I'm dealing with for business sales (the only reputable one I can find) wants to wait several months to see further records of growth this year and it means waiting 6 months. I just cant bear it anymore and I've fully learnt my lesson on "having the end game in sight" for next time!
I know this is limited information to go on (and obviously I havent made anything public here) but net assets of the business are many hundreds of thousands of pounds (but not millions). Can anyone suggest any other routes to sale I may not have thought of? I've been tempted just to liquidate it but I reckon it'll take just as long to sell through our assets etc and its not really the fitting end to 10 years that I'd prefer along with keeping jobs for the staff.
Any advice/suggestions appreciated. Similarly, if you were in a similar position a few years ago, got out and havent looked back - your story would be words of comfort to me at this stage! Robin.
Edited by murcifoster on Tuesday 10th March 13:52
No experience but it seems a shame to liquidate a profitable company. As you seem to be saying that you've got everything out of the company that you want then it might be time to sacrifice some of the current profitability to employ a more senior manager, on a higher salary, who, although profits will dip for a while will soon increase the profitability back to it's current level and beyond.
It should then be a simpler matter to find a buyer, or even persuade the senior manager to effect a management buy out. Maybe the person you recruit should be taken on with that in mind at the outset.
It should then be a simpler matter to find a buyer, or even persuade the senior manager to effect a management buy out. Maybe the person you recruit should be taken on with that in mind at the outset.
Without knowing the industry or the type of employee you currently have it is difficult to advise.
Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
Why? ^^
Its a tough time but hang on for a little longer. Why do your advisors want you to wait another 6 months exactly? Are they on a retainer monthly? You say a better manager would be too costly, so put up your prices by a small amount to cover this.
A merger isn't really what you want It seems, you don't want to stay on the same industry.
I work in the business sales area (well, I consult for it) but there isn't much more I can add.
Its a tough time but hang on for a little longer. Why do your advisors want you to wait another 6 months exactly? Are they on a retainer monthly? You say a better manager would be too costly, so put up your prices by a small amount to cover this.
A merger isn't really what you want It seems, you don't want to stay on the same industry.
I work in the business sales area (well, I consult for it) but there isn't much more I can add.
Storer said:
Without knowing the industry or the type of employee you currently have it is difficult to advise.
Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
Probably wrong but are you involved in the storage industry? (username guess)Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
The true profitability of the business is how it performs without you there, therefore the correct starting point is the profit level with the right (better paid) management in place, therefore it is ultimately worth less.
As a buyer I would want to see that it could operate on its own two feet without your input as it seems at the moment it is heavily reliant on "you".
As a buyer I would want to see that it could operate on its own two feet without your input as it seems at the moment it is heavily reliant on "you".
Zoon said:
Storer said:
Without knowing the industry or the type of employee you currently have it is difficult to advise.
Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
Probably wrong but are you involved in the storage industry? (username guess)Have you really looked at all your current staff to see if any of them could step up? They must understand the business to an extent, and may only need help learning to manage.
I contracted out the management and operation of my business nearly 10 years ago. I am still involved financially and in the business direction, but daily management is down to others.
I have started another enterprise which is now running well and takes relatively little of my time. Now I am on to income stream number 3 which is more of a paying hobby.
Most of my friends see me as retired and much of my time is my own.
You may need to think laterally for the best solution.
Maybe a merger with one of your smaller (hungry) competitors, with you staying involved but them taking the daily lead is a possible answer. There should be some cost savings and the merger may make a company that has 'presence' in your field. Picking the right partner to merge with is not easy, but the effort may be very worthwhile. You may also find it rejuvenates your enthusiasm for the business.
The benefit of this type of solution is that it maintains an income stream (maybe reduced a bit) while you start something else. There is no guarantee a second enterprise will be successful so it also provides a 'fall back' income.
My thought anyway.
Paul
It is one of my businesses and a very simple and successful one.
Paul
Zoon said:
Storer said:
Bit of a give-away that!
It is one of my businesses and a very simple and successful one.
Paul
Can it be problematic or is it pretty straightforward?It is one of my businesses and a very simple and successful one.
Paul
Obviously once you've acquired the site etc.
You learn how to deal with customers and how to judge them. You get a feel for those that may be trouble. I usually turn them away (gently).
I try to make the visit to their storage unit as pleasant as possible. We are in the countryside and I make the most of our setting to create a pleasurable environment (I like it too).
I also get to meet some fascinating people.
murcifoster said:
I run a small business in a specialist sector that I've been running for around 10 years. Its successful and highly profitable, with reasonable barriers to entry (investment) but its a small niche industry without any real reason for a larger competitor to buy us out. At the same time, its been very hard to find good managers in the past who know enough about the industry to be effective and we've gone through a few over the years. I cant afford to pay more money for better talent while keeping it anywhere near as profitable and there would still be things the manager couldnt do that require someone fully invested to care enough about doing right (its not a simple business in many respects). I used to love running it but its grown tiresome and tedious - its the longest I've done anything and I'm simply ready for a new challenge - its growing as it stands still with me running it, but could do even better with a fresh owner. At this point, I have lots of money but no freedom - I'm "time poor" and I'm more acutely aware now than ever that the time is more valuable. Each day that goes by its sheer frustration because I have plenty of money to take time off and then start something new with my full attention, but I cant let it die and leave it without a captain. I cant even take several weeks off currently as they need me there to keep them on point otherwise it unravel. I delegate plenty (before this is suggested - which is easy to suggest if youre reading a textbook but in practical terms even those at the height of their game are needed to lead their troops) but my leadership is vital to keeping the details spot on otherwise it starts to be less profitable.
At this point therefore I'm fed up. I've built something successful but I'm stuck with it and while I'm fully aware that it could be worse and I do have something I could continue to make a good living from, every day is tedious and I've had enough. I'd sell it for *under* market value simply to get my life back before I burn out. However, the company I'm dealing with for business sales (the only reputable one I can find) wants to wait several months to see further records of growth this year and it means waiting 6 months. I just cant bear it anymore and I've fully learnt my lesson on "having the end game in sight" for next time!
I know this is limited information to go on (and obviously I havent made anything public here) but net assets of the business are many hundreds of thousands of pounds (but not millions). Can anyone suggest any other routes to sale I may not have thought of? I've been tempted just to liquidate it but I reckon it'll take just as long to sell through our assets etc and its not really the fitting end to 10 years that I'd prefer along with keeping jobs for the staff.
Any advice/suggestions appreciated. Similarly, if you were in a similar position a few years ago, got out and havent looked back - your story would be words of comfort to me at this stage! Robin.
Currently in similar shoes although a popular industry and being written to all the time to buy out. I enjoy the work but having done it for many many years you want something different. A few years ago was also not able to take time off, getting stressed and really fed up with it all. We then got in additional staff who could take on what I was doing so I then could have 2 week holidays and take time off. Working on adjusting the business so I can take off more time but still own and run a sucessful business. At this point therefore I'm fed up. I've built something successful but I'm stuck with it and while I'm fully aware that it could be worse and I do have something I could continue to make a good living from, every day is tedious and I've had enough. I'd sell it for *under* market value simply to get my life back before I burn out. However, the company I'm dealing with for business sales (the only reputable one I can find) wants to wait several months to see further records of growth this year and it means waiting 6 months. I just cant bear it anymore and I've fully learnt my lesson on "having the end game in sight" for next time!
I know this is limited information to go on (and obviously I havent made anything public here) but net assets of the business are many hundreds of thousands of pounds (but not millions). Can anyone suggest any other routes to sale I may not have thought of? I've been tempted just to liquidate it but I reckon it'll take just as long to sell through our assets etc and its not really the fitting end to 10 years that I'd prefer along with keeping jobs for the staff.
Any advice/suggestions appreciated. Similarly, if you were in a similar position a few years ago, got out and havent looked back - your story would be words of comfort to me at this stage! Robin.
Edited by murcifoster on Tuesday 10th March 13:52
Do you need to sell to get the capital to reinvest or can you get a new captain in as other have said to run the business to give you the free time? The issues with a new captain is that it could all go to pot but if you have a suitable check on it then if its not doing well you can step back in.
My goal is that my children want to run my business and I do too so I can retire and still get a steady income. But thats at least 10 years away - so just working on getting better at managing my time, getting technology to help free my time and changing our working practices to free time. Dont really want to sell as it was my parents family business and will think of that as failing tbh. I know you have only owned it for 10 years so different set up but be great if you can keep it going as an income stream and do whatever else you want.
As someone above said, why would anybody be interested in buying a business which relies heavily on you're input if you're not hanging around? I think you may need to put a bit money into finding someone, or some people, who can run the business without your involvement - you can then either sit back and enjoy the income it provides with your very limited input, or sell on as a company with a management team in place which would be much more saleable.
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