How to grow? That is the question every successful entrepreneur will face at some stage in their business journey. It’s a particularly challenging question when potential purchasers for the business come along or when there is an opportunity to buy a competitor at a good price. It’s also a question that might have a different answer at different stages in the business’s lifecycle.
Some interesting real life examples:
Business 1- This business launched in Feb 2004, got a lot of positive publicity and then received an offer of $75mil in spring 2005. They decided not to sell, with further offers of $1,500mil in 2006 and $15,000mil in 2007 also refused. This business now has a market value of £488,000mil and continues to grow under the same lead entrepreneur.
Business 2- Launched in 1994 and within 4 years had the opportunity of buying out one of their main competitors (Business 3) for $1mil which they declined. The whole market saw rapid growth and they had another opportunity to buy Business 3 in 2002, this time for $5,000mil. Again they again declined. In 2008 they themselves were a buy target for $40,000mil, but they chose not to sell. The current position is that Business 2 was recently sold for $4,600mil and Business 3 is worth $639,000mil.
If you haven’t guessed Business 1 is Facebook, Business 2 is Yahoo and Business 3 is Google.
Not every entrepreneur is running a company with the growth trajectory like these three, but there are lessons in these examples for everyone.
If you genuinely believe you and your team are best placed to maximise the future growth of your business, then there would seem little point in selling early. However, to realise its potential you will need a clear roadmap and may decide that investment or partnering with another business will help you achieve the growth as quickly as possible.
Alternatively, if your skill is setting up and getting the business through its first stages of growth, you may be better considering a well-timed sale so you can then focus on developing other opportunities. By partnering or selling to those better equipped to develop a mature business you will see your start-up grow and thrive in the long run.
This will probably be one of the hardest decisions of your life. You’ve nurtured it and given a huge part of your life to this business, but just as with children there comes a time to let go. Get this right and you should enjoy seeing how others can take your business creation on to even greater heights. Perhaps you can then go full circle and start mentoring and supporting new young entrepreneurs on their journey.
Understanding where you add most value to the overall business growth journey is crucial because you are then likely to be much more successful and you’ll also be far happier.
At Jersey Business, we are here to help you at all stages of your business journey, acting as an independent sounding board, so do contact us for an appointment.