Many entrepreneurs spend years building something great and then are left alone with the question: who do I pass this on to? There are four good options even if you have no one in mind.
The first step is often to gain indicative insight into the possible value a potential buyer would be willing to pay for your business.
Yet there must come a time when you step back.
Most entrepreneurs who sell their business do so without anyone in the family or business ready to take over. You have no son or daughter willing to take over, no employee ready, and no obvious successor in sight.
Whether it's because you're ready to retire, because your health demands it, or because you're just ready for something new, the same thing applies in all cases: what matters is that you transfer your business the right way, to someone who will take it on properly and for a price that does justice to what you've built.
There is no standard solution. Which route is best for you depends on your business, your people and your personal situation. Here are the four most common routes.
Selling to an industry peer or strategic buyer is the most common route for entrepreneurs who do not have a successor, as there are parties in virtually every industry who are actively seeking a business like yours. Consider a competitor looking to strengthen its market position, a larger company looking to acquire your customer base or expertise, or a foreign party looking to enter the Dutch market through an acquisition. They know the industry, understand what they are buying and can pick up the integration quickly because they don't have to reinvent the wheel.
That also makes strategic buyers willing to pay more than an investor looking purely at financial returns, because for them the value is not only in profits but also in what your company adds to their own organization.
Carefree Marketing was sold this way. Founder Melvin Hardey: "Eventually the company was sold to an industry peer, then I was able to go back to building my other businesses."
If you employ someone who has been around for a long time, knows the customers and perhaps has expressed a desire to take over, a management buyout is a serious option to explore. In a management buyout, an employee or group of employees takes over the company from you as the owner, keeping the company in trusted hands and ensuring continuity for customers and staff.
One point to consider is financing, because an employee does not always have enough of his own capital to fully finance the acquisition. There are several ways to solve that such as a bank loan, an earn-out construction where you receive part of the purchase price over a longer period of time or a combination of both.
Brigitte Hertz did it this way: Herz Trainings was transferred to one of her own trainers. Brigitte: "Together we were able to get all the steps right so that the transfer was a success." At Jagerteam BV, Johan and Jeroen took over the cleaning business from Jan who was retiring. There were good intentions but the agreements were informal. We formalized everything into a legally watertight deal.
If you don't have a suitable successor internally but have a company that is running well, an outside candidate can take over and run it themselves. A management buy-in candidate is someone who is actively looking to buy and run a company and has the experience and capital to do so.
The difference with a management buyout is that this person doesn't know your company yet, which means the selection process requires more time and guidance. You want to find someone who not only gets the financing done but also has the personality and experience to take your company forward in a way that fits with what you have built. A good match in that area largely determines whether the transfer goes smoothly.
A fourth option is to sell to an investor or a party that is actively acquiring businesses to further grow them. This route works well if your business has stable profitability and there is a strong team that can carry the operation independently without your daily involvement.
Investors evaluate a company differently than a strategic buyer or a management candidate because they look primarily at the return on their investment and at the scalability of the company. The deal structure in a sale to an investor is often more complex than in the other routes, making good guidance in negotiations here especially important.
Not sure which route is right for you? We'd be happy to look it over with you.
We accompany you from the first conversation to the transfer at the notary. We take care of the valuation, the sales book and the active search for the right buyer. On average, a trajectory takes 7 months and we work on a result obligation: no sale means no full payment.
Want to read more about how the sales process works: then click here
In most cases, yes. A business that is heavily dependent on its owner is worth less than a business that functions well even without the owner, but that's something you can address before you go to market. We'll help you reduce that dependency so that the value to a buyer actually shows up.
Through a combination of active networking, platforms such as Brookz and BedrijvenTeKoop and targeting potential buyers in your industry. We create a long list of candidates and qualify them before you sit down with anyone.
This varies greatly from situation to situation. Sometimes there is a serious candidate within a few weeks and sometimes it takes longer, but on average the entire sales process takes 7 months. Good preparation and a realistically priced company shorten that time considerably.
[Read more: How long does it take to sell a business?]
That's a good position to be in. We guide the selection and negotiations so that you choose not just based on price but on who is the best fit for your company and your people.
On average, 6 to 12 months. Most of the time goes into finding the right buyer and going through the bookkeeping process. You only have to spend a limited amount of time there - we do the heavy lifting.
No, not right away. We work discreetly. Most sales processes are completed without staff knowing in advance. We discuss together when and how to communicate that.
The fees consist of a start-up fee and a results-based fee upon a successful sale. You don't pay a full fee if the deal doesn't go through.
[Read more: What does an advisor cost when selling your business?]
Not having a successor is not a problem because it is the situation of most entrepreneurs who sell their businesses.
