Receiving more than one offer for your company does not mean choosing the buyer with the highest price. Cash at closing, earn-outs, warranties, the entrepreneur's future role and certainty of completion can significantly change the final outcome.
An SME can report strong results despite ageing machinery and delayed investment. During a sale, however, the capital required to maintain production may affect the company’s valuation and the terms of the transaction.
Many SMEs own the factory, offices or premises where they operate. For the entrepreneur, the property often represents financial strength and the result of investments made over many years.
Supplier dependence arises when an SME cannot ensure operational continuity, margins or delivery times without relying on a small number of key suppliers.
When an entrepreneur thinks about the value of their company, the focus almost always goes to revenue, margins, EBITDA and growth prospects. Much less often, the starting point is an apparently operational question: how much capital is tied up in inventory?
For an SME, winning a major customer can feel like a turning point. Revenue increases, reputation improves, and the company gains credibility with banks, suppliers and the market.
In many SMEs, the same scene repeats itself every week. An important customer calls the entrepreneur directly. The most delicate negotiation lands on their desk. An out-of-policy discount needs their approval. The sales team manages the relationship, but when the decision really matters, the founder steps in.
For many SMEs, the first acquisition does not begin with a large-scale consolidation plan. It starts much closer to home.
Preparing to sell a company often begins long before an entrepreneur is ready to make a final decision. There may be no buyer at the table, no advisor appointed and no negotiation underway. There is only a thought that becomes more frequent over time: “At some point in the next few years, I may want to consider selling the company.”
When someone talks to you about the possibility of selling your company, your first reaction may be surprise, irritation or distrust. “Why are they telling me this right now?”
