A fascinating result of doing due diligence first, is to
learn that many of those clients really don’t want to sell at all, but they
have run into a problem they just can’t solve, and “Selling Out” appears to be
their best and often, their only option.
When presented with a solution to the challenges they’re
struggling with, most will jump at the opportunity to “fix their business”
rather then sell it.
Most small business owners suffer from what I call “the Coke
Bottle Syndrome.” Think of one of those early coke bottles that were about 7
ounces, the glass ones where there were a lot of curves in the glass and the
bottles were tinted green.
Now picture your business as being housed inside a giant
coke bottle. The curved glass and the green tint distort all the light that
comes into your business. Now you’re quite busy in your business and you don’t
have time to look outside often, and you seldom bother looking outside because
nothing is really clear.
When you run into a problem you have never encountered
before, you find it difficult to search out a solution. You’re too busy to take
the time to get out of the bottle to search for a solution. Then, you reach the
conclusion that the problem cannot be solved, at least by you, so you decide to
sell.
A Business Intermediary generally sits in the corner of the
warehouse looking at your coke bottle, sitting in a case of 23 other coke
bottles, on a shipping pallet of maybe 50 cases, sitting in a pile of pallets
amongst a hundred of other products sitting on piles of pallets. The outsider
sees things from a totally different paradigm.
- Simply
finding a new bank, or remortgaging your property or re-amortizing some term
loans can solve many problems. - Other
times, perhaps an investor or new financial partner can make a difference.
There is now the beginning of a whole new source of financing opportunities
currently known as recaps. A private placement or an Initial Public Offering
could also provide a solution. - Often
we find the owner is so overloaded that he/she is suffering from burnout. A
relatively simple solution is available for those situations. - Sometime
we need to empower your employees and as a result, they’ll enable you to
develop solutions internally. - Other
times, the business has grown beyond your ability to manage it. Hiring a
manager to provide new skills and support will address the problems satisfactorily. - We’re
finding more and more, that the son or daughter really would like to be
operating the family business, but has been unable, for whatever reason, to
communicate effectively with the parent who operates the business – and
has never had the training and orientation that’s so important to success. - Research
and planning in the business are often lacking, and when assessed by an outside
consultant, many opportunities are discovered that the owner has been “too
busy” to recognize or take advantage of. - Taking
the time to clearly identify and understand the problems and challenges will
result in “miraculous discoveries” that can make a huge difference. - Often
the solution is not to sell, but to buy out a competitor or a near competitor
to obtain additional product lines, customers, employees, capacity or location,
etc. - We’ve
found solutions as simple as giving a long-term employee more authority and
responsibility will make a huge difference. - Sometimes
the best solution is creating a strategic alliance with some other business to
address a problem or a project. - The
expansion program of my business was extraordinarily challenging until we
implemented a program of “local partnerships.” - Advisory
boards are a wonderful way to bring many minds in to tackle a seemingly
insurmountable problem. Funny thing about those “old guys” on the advisory
board – they have solved problems similar to yours many years ago. - If
you’re in an unhappy, non-productive partnership, then buy the partner out.
Bottom line: At the end of the day, selling out should be
your last choice, not your first! Once you’ve sold out, it’s gone, and you
can’t get it back if you should later realize that you should not have sold
out.
Take your time to fully learn all you can about your business, your customers, your suppliers and competitors, your employee’s strengths, your
products/services, changes in your industry, new technology and new ways to
sell (ie: through the internet). Check with your kids (nothing worse than
selling and then have your son/daughter say “why did you do that, I wanted to
run the family business?”). The list goes on, and on, and on.
