There’s a certain romance in selling your company. The excitement of the big payout and the validation of your idea. You will feel flattered that someone recognizes your accomplishments and wants to take you to “the next level”.
It’s very compelling. I spent 10 years nurturing my baby, my creation. I was at the point where it needed much more money and knowledge than I could provide. Rather than let it whither and my employees that had trusted me risk their families and their homes I chose to align with a larger company.
My smallest competitor was a publicly traded company with over $1 billion dollars in market capitalization. I owned a 25 employee company that recently hit $5 million in sales.
The difference was my staff. We all had a mission and common goal and moved the same direction. There was a company culture to do the right thing and make our clients productive. No corporate structure or requirements, no metrics, just make sure our clients can do what they need to do.
You will hit the middle ground where you’re too big to be small and too small to be big. It’s a dangerous place because you can become complacent after outgrowing your smaller competitors and not realizing you are a rounding error to your bigger competitors.
If you’re in a cash intensive business you’re in a very dangerous area. Adding a new customer in my business could cost $2,000-$10,000 before sending the first invoice. Growth frequently outran capital to support the growth. It’s difficult to wake up every morning and essentially play all of your cash on every single hand.
It is imperative to find a local bank that can understand and appreciate what you are doing and you need to be able to explain your mission and goals. The best offhand compliment I received from my banker was “I don’t understand what you’re doing but you seem to be doing a good job at it”.
Think very hard about your options and what’s best for you, your family, and your employees. No one will understand it like you do so don’t rush in and make sure you know all of the details and ramifications of a sale. I don’t want to be over positive or negative, it can work out great as long as you know what your goals are.