By Richard Timman
Specialist Corporate Acquisitions
You've spent 30 years building a business that works.
A business with regular customers, good people, stable sales. But if you are honest: there is no one around you who wants or can take over. Your children have other plans. Your employees are loyal but not entrepreneurs. And you know you have to quit at some point.
That feeling knows more entrepreneurs than you think.
And yet it remains silent. Because if there is no obvious successor, it seems like there is no way forward. As if quitting automatically means closing the doors.
But that's not true. There are more options than you might suspect.
In this article, I list them.
This is the most logical route for many entrepreneurs if there is no successor in the family.
An outside buyer could be anything: a competitor looking to grow, an investor actively seeking a profitable business, or an entrepreneur looking to make a move in your industry.
What surprises many entrepreneurs: the market for SMEs is strong right now. There are an average of seven interested buyers per business offered. That means you can choose, not only on price but also on who is the best fit for your business.
Because that's what counts. What happens to your employees and customers after you leave matters.
Good preparation makes all the difference here. The earlier you start, the stronger your position at the negotiating table.
An MBI is a variation that is less well known, but works more often than you think.
In this, an outside manager buys your company. This is someone who is not already in your company. He or she wants to become an entrepreneur, has experience in your industry and is looking for a company to get into.
For you as a seller, this has a big advantage: you are selling to someone who is motivated and serious about doing it and is willing to pay a fair price.
It does require careful selection. You want someone who understands the culture, who will bring your people along and who can build the company forward. That's where we help.
Perhaps the successor is already here but you haven't looked at it that way.
An MBO means that one or more employees take over the business. Someone who has been in the business for years, knows the customers and understands the processes. Someone who has just never taken the step of becoming an owner.
That need not be a barrier. Financing through a bank or through an earn-out construction makes it feasible for many employees.
What makes an MBO successful? Clear agreements. Not based on trust alone, but also on paper. What is the company worth? Who pays for what? What does the transfer period look like?
Those conversations are sometimes uncomfortable because they are often people with whom you have worked for years. But they are necessary and they protect the relationship in the long run.
Not everyone wants to or can quit overnight.
A phased transfer means that you transfer the business step by step. You sell part of the shares, stay involved for another period of time, and gradually withdraw. That way, you give the new owner time to grow in and you give yourself room to let go.
This works well if:
- The buyer or new owner is not yet fully ready to go it alone
- You yourself don't want to quit overnight
- There are knowledge or relationships that take time to transfer
A phased transfer requires clear agreements about roles, responsibilities and the final moment. Without that clarity, misunderstandings arise and that is exactly what you want to avoid.
Sometimes the best buyer is someone who is already in your market.
A competitor looking to expand. A larger company that wants to add your customer base, your people or your location to their organization. This is also called a strategic acquisition.
The upside: strategic buyers often pay more than financial buyers because your business is worth more to them than purely based on the numbers.
The downside: it requires discretion. You don't want your customers, employees or suppliers to hear too early that you're talking to a competitor. You don't just have those kinds of conversations. You need someone who knows how that works.
I put it there anyway. Because sometimes it is reality.
If a business is too dependent on its owner, if margins are too low to make an acquisition attractive, or if a buyer simply cannot be found, then sometimes a controlled wind-down is the fairest choice.
But I rarely see this happening. More often it is a conclusion drawn without serious examination of all the other routes.
Before you draw that conclusion, I want you to have explored the other five options first. Sometimes the solution is closer than you think.
If you're reading this article, you're probably an entrepreneur who knows something needs to be done but doesn't yet know exactly what.
That is exactly the time to engage in conversation. Not to decide anything. But to understand what your options are, what your business is worth and what route suits you.
At Next Steps, we guide an average of 30-40 transactions per year. We know the routes, the pitfalls and the opportunities. And we're honest even if that means advising you to wait a little longer.
Want to know what your business is worth and what options are realistic for you? Then get in touch. The first conversation is non-binding.
Because it always starts with a conversation.
Specialist Corporate Acquisitions
