Permanent Podcast: Real Talk About Private Equity and Buying, Selling, and Operating Small Businesses Preparation: When "Don't Sell" Is The Right Answer (EP.04)
Sep 23, 2019
Brent Beshore, an experienced business strategist, and Emily Holdman, a consulting expert, dive deep into why some business owners should reconsider selling. They dissect the financial pros and cons of selling versus retaining ownership, using a hypothetical manufacturing company as a guide. The conversation covers risk assessment, the complexities of deal structures, and the potential benefits of keeping a stake in your business post-sale. Their insights challenge the conventional wisdom about selling, making a compelling case for staying put.
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Selling Caps Your Future Upside
- Selling makes your earnings timeline finite and can cap long-term upside.
- Continuing to own preserves unlimited runway for future earnings and value growth.
Don't Trade Future Growth For A Check
- Don't assume a sale will pay you ten years of earnings today unless you truly have a hockey-stick growth business.
- If you plan to keep operating the business, retain the equity rather than trading future upside for a one-time payout.
Buyers Value Today's Performance
- Buyers price businesses mostly on current performance and near-term prospects, not fanciful projections.
- Selling converts uncertain future value into a finite, often lower, realized amount.