Some people started their small businesses and worked hard to grow them into a sizable business organization. Before they know it, they receive offers for a bigger corporate for an acquisition that’s worth millions of dollars. This is a huge offer, especially if the businesses were built from scratch. The big question is it the right time to finally to let the business go and enjoy the early retirement? It is an enticing prospect, especially if we have more and more than enough money to fund decades of comfortable retirement. However, there are many things to consider. We should be aware that it’s not only our personal life that’s at stake. The business is often a place where our children can grow themselves. They can replace us in the ladder of leadership and make a great life for themselves. It would be selfish if we only think about ourselves and not thinking about the prospect of things that could happen to our children.
As business owners reach their mid-fifties any offer for axquisition will certainly be interesting. However, they can reject the offer if there’s a clear path of transition to their children. At this stage, children should already work inside the company at lower position and they should already by familiar with the inner working of the business. Big corporate is interested to acquire our business if there’s a clear prospect for future growth. This should be seen as indication that our business will grow further in the future. If it’s true, then there’s little reason that we should sell the business. The junior should be able to take over the leadership in 5 years and bring the continued success for the business. It means that the business will worth much more than today. However, there’s factor that could make it sensible to sell our business. There could be a higher degree of risk in the market that makes future success less certain. However, the big corporate may be able to drive the risk down due to its huge resources.
Our business may potentially lack the raw material needed to sustain full operations. We may also don’t have strong enough chain of supply for sustained growth in the future. If we are facing the prospect of stagnation due to the lack of resources and capabilities, it is a good idea to consider about the acquisition. If stagnation does occur, there’s a possibility that our business will decline and steamrolled by the competition that has better resources. By that time, it’s all too late and there will be no more offer for acquisition. The trick is to determine the right time to sell our business. We should be able to sense when our business has almost reached its peak and to progress to the next level, much more is needed, but we may not be able to provide that. As part of the deal, we may ask that some key personnel, such as our children and other important individuals will still be employed indefinitely, although the ownership has changed.
