Yes, you read that right: eat ánd be eaten. Not in every sector, It’s a ‘survival of the fittest’. Where you are almost forced to become ‘the biggest’. I know plenty of markets where similar companies can easily earn a good living side by side. Often led by hardworking entrepreneurs with a passion for their profession and product. Successful because of the good genes, smart ideas, great drive and years of experience. Beautiful companies where the employees have a strong bond with the company and the entrepreneur.
The word ‘business takeover’ does not appear in the dictionary of many of these entrepreneurs. All focus is on organic growth and financing is often done from own resources. And suddenly there is that unexpected opportunity to add a wonderful company to your own activities. Or are you approached by a fanatical competitor, investor or intermediary. Sometimes even with a concrete offer for your company, where you have to blink to see if you are reading it correctly. And although those opportunities may not come to you and you are not approached, at some point the years start to count. Do you think about the succession in your company and how you will transfer the shares or not?
It’s important for every entrepreneur to orientate themselves on the subject of ‘business takeover’. Although it may not be necessary in your sector to grow through acquisitions. Sooner or later you will be confronted with the subject. And then you better be well prepared, so that you can confidently make the right choices and can keep control.
Ask yourself the following questions:
– If I would like to take over a company, which criteria should this company ideally meet?
– What kind of financing for the acquisition would I be willing and able to apply?
– If I would like to sell/transfer my shares to another, what type of buyers are eligible? Investors, strategic buyers, competitors, buy-in candidates, family members?
– How does selling a business work and what type of sales deals are available? How promising is a sale of my shares? How much time does a sales process take?
– How would my co-shareholders respond to the above questions?
– What is my company’s approximate value?
Find a reliable sparring partner so that you are ready when that unexpected moment of ‘eating’ or ‘being eaten’ does occur. And you can probably do some smart things in your company right now to be better prepared for that uncertain future.