Two beasts stalk entrepreneurs: Boredom and burnout. We meet company owners who suffer from both of these nearly every week. Generally entrepreneurs see them as a negative. And certainly from a personal standpoint, they are. But to a buyer they both mean different things.
You see, to you, as the professional owner of a business, boredom is quite frankly boring. But what it means to a buyer is this: You have nothing to do, which indicates one of two things:
Burnout is in some ways similar: 80-hour weeks for 30 years have taken a toll on your health, family, marriage, friends, and eventually the business. You finally reached a point where your body, doctor, or psychologist (or all three) tell you it is time to pull the plug (not literally but figuratively) and slow down.
When business buyers encounter boredom with a seller in a growing company with a great middle-management team, they get excited. It means that if they buy the company and the owner heads off into the sunset, the company should continue thriving.
Sometimes, under the second scenario where the owner has lost interest due to boredom, this too can be seen as a potential positive because chances are good that with the right leadership, investment, and guidance, growth can be restored. However, it is very rare that a buyer will pay a premium for a business where the owner has not been motivated and growing the company.
The same is true for business owners that are burned out. Chances are good that the impact of the burnout has been negative on the company. In most cases, especially when due to health reasons the owner is forced to back off his/her 80-hour weeks and has no replacement groomed, company performance will be stunted. And, again, buyers are rarely willing to pay a premium and reward a business owner for lack of attention due to burnout.
Generally speaking, if you want top dollar for your company, it is far better for you to look for a buyer BEFORE either boredom or burnout impact you personally. Sadly, all too often we meet folks once they have already been hit with the impact of one of these two issues.
The good news is that unless you are facing physical and mental issues that preclude their improvement, both of these conditions can be improved prior to selling your business. In fact, we have a number of clients who tell us that they actually are rejuvenated during our evaluation phase because they begin to see new possibilities for the company as we delve into future growth opportunities.
If you are reaching a point where you are considering a sale of your business, take stock of why. Are you burned out? Are you bored? If so, what can you do now to re-energize yourself, and most importantly, your company, so that you can attract buyers who will pay a premium?
To learn more about how you can improve your operations and position yourself for buyers, attend a Generational Equity seminar on how and when to exit.
Carl Doerksen is the Director of Corporate Development at Generational Equity.
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