Do you remember the amazing business books, Good To Great, Built To Last and In Search Of Excellence? These books used terms like “great, enduring and excellence” to describe their amazing featured businesses.
Jim Collins, the author of Good to Great has a new book called, “How The Mighty Fall.” Maybe you have read it. Here are just a few of the featured, great books.
1. Abbott Laboratories → Stock up 0%
2. Circuit City → Bankrupt
3. Fannie Mae → Placed in conservatorship
4. Gillette → Bought by P&G
5. Kimberly-Clark → Stock up 1%
6. Kroger → Stock up 0%
7. Nucor → Stock up 4-fold
8. Philip Morris → Stock down 20%
9. Pitney Bowes → Stock down 20%
10. Walgreens → Stock up 0%
11. Wells Fargo → Stock up 0%
What’s The Point?
Every business has a life cycle. It’s called the Sigmoid Curve. If you have never seen the Sigmoid Curve, it looks like an elongated or flattened S. It basically shows how businesses start with uncertainty and great expense, in the beginning, the hopefully gain traction and grow before stagnating and declining.
If a business doesn’t ultimately redefine and reinvent themselves, they will go out of business. Examples: 8 Track Tapes, CD Rom, Polaroid Cameras, Boom Boxes or even most recently BlockBuster. No one is going to BlockBuster these days to pick up VHS tapes to watch movies.
Business Owners Are Amazing People
I typically meet with 3-5 business owners a day. The vast majority of these owners have owned their businesses for years. Recently I met with an 82-year-old man that owned his business for 58 years and I met with a lady that just celebrated the 54th year of her business.
The people that I meet with are amazing people. They are to be admired for their perseverance, vision, work ethic, generosity, ability to adapt and countless other wonderful characteristics. As wonderful as these people are they all at some point will exit their business and hand the reins over to someone else.
Many business owners are able to benefit personally through the sale of the business to some awaiting young entrepreneur. I personally believe that business owners deserve to be rewarded handsomely for their years of hard work, sacrifices and personal investment.
Where Is Waldo?
I am sure you have seen the puzzles where you try to find the hidden character in the picture. Perhaps you have seen the signs at the mall or an amusement park with the huge arrow that says, “You Are Here.”
Business owners would be wise to also find themselves on the life cycle of the Sigmoid Curve. No one else in your organization has that authority or leadership position.
The best time to sell your business is when your business is growing and when you have the books to document this growth. When your business is in decline, it is a much tougher sell. It may not be impossible to sell but it takes a very special buyer that is willing to invest their money to turn your business around without your experience.
Retirement, health, other interest, family issues, and exhaustion are a few reasons we are given as motivations to sell a business. None of the reasons are inherently right or wrong; they are simply foundational reasons for each owner.
It Isn’t All About The Numbers
Selling a business is an emotional decision. Business owners will often refer to their business as their child and for good reason. So much time, so many dreams, so many sacrifices, in many ways it is a lot like raising a child.
When a child leaves for college or the military or simply leaves home, often a lot of tears are shared. There is also a lot of joy (wink, wink). Selling a business can evoke many of the same emotions.
Transworld Business Advisors understands the numbers and the emotions of selling a business because we have been assisting business owners for 40 years. It may not be easy but having the right business partner at this critical step helps in so many ways.