The successful entre­pre­neur as a stumb­ling block in the sale of a company

Time and again, we come across entre­pre­neurs who run their businesses extre­me­ly successful­ly and achie­ve earnings far above the indus­try avera­ge. This obser­va­ti­on appli­es regard­less of the indus­try. But which compo­nent is respon­si­ble for them becoming a stumb­ling block when selling their life’s work?

What makes these compa­nies so extra­or­di­na­ri­ly successful?

These compa­nies are led by strong perso­na­li­ties who have fully tailo­red their compa­ny and its struc­tures to your needs.

What does that mean in detail?

As a rule, we are talking about compa­nies with a turno­ver of up to 5 milli­on, where the owner is fully invol­ved in the day-to-day business.

Important decis­i­ons always requi­re its approval. These are made unbureau­cra­ti­cal­ly and quick­ly, as the decis­i­on-making body is the owner himself.

There is no second manage­ment level. From the entrepreneur’s point of view, this is also not neces­sa­ry, as all the strands in the compa­ny conver­ge with him.

These entre­pre­neurs act multi­func­tion­al­ly in some cases. They are innova­tors, negotia­te purcha­se and sales prices and take on the distri­bu­ti­on function.

Why can these so successful compa­nies often only be sold at signi­fi­cant discounts?

The short answer is: becau­se they are fully tailo­red to the owner. If the owner leaves the compa­ny when it is sold, this can have a signi­fi­cant negati­ve impact on the purcha­se price, as:

  • sudden­ly large parts of the company’s inter­nal know-how are lost,
  • new struc­tures have been set up to safeguard the know-how,
  • the functions previous­ly united in the person of the owner must be distri­bu­ted over several should­ers and
  • the cultu­re of the compa­ny is lost with the depar­tu­re of the owner.

For the acqui­rer, these are factors of uncer­tain­ty that he would normal­ly like to see taken into account in the purcha­se price, since hiring new employees to safeguard the company’s perfor­mance can requi­re a considera­ble amount of extra work. Not to menti­on the cases where the entire know-how (since it is ancho­red in the boss’s head) also goes with him.

In the worst case, this heavy depen­dence on the business owner can lead to the failure of sales talks.

What to do?

  • Prepa­re your compa­ny in good time for the planned sale of the compa­ny and ensure that the success of the compa­ny does not depend on you alone.
  • Create a second level of manage­ment to which you can distri­bu­te the functions that are united with you.
  • Make sure that the know-how as well as proce­du­res and proces­ses are neatly documented.
  • If neces­sa­ry, invol­ve a trusted key employee in the sales process. This creates securi­ty on the buyer’s side.
If these crite­ria are met, it will be easier for you to achie­ve a good sales price for your business.