As an entrepreneur, you might find yourself in a dream position: the founder of a thriving, successful brand. Now that you have achieved your goals, what is the next step?
As an entrepreneur, you might find yourself in a dream position: the founder of a thriving, successful brand. Now that you have achieved your goals, what is the next step?
You might be wondering if you should sell your business now or in the future — the trouble is, you might not have thought about how to sell your business. It is common for company founders to have questions like:
- Who will buy my business?
- How much can I sell my business for?
- How do you value a small business?
- When should I sell my business?
The last question is often the most important — timing is everything when it comes to making the best decision to secure the legacy of your company. Below are three signals that Foundry leadership consider the most critical if you’re thinking about when to sell your business.
- You Have Hit a Ceiling
Despite running a successful business, many founders discover that they reach a certain level where further growth is impossible without additional time, resources or money. “These brands get to an inflection point where it’s going to take a calculated strategy to grow or scale,” said Kyle Walker, Co-Founder and Chief Acquisition Officer at Foundry. “They’ve taken it as far as they can.”
When Foundry speaks to business owners, the team often finds that the ceiling can be moved. Part of the process of getting to know potential sellers, Walker says, is understanding the challenges and opportunities for their company. “It becomes about identifying the puzzle pieces — what has been keeping this company from becoming bigger or better?”
Though selling might mean taking a risk, it’s important to think about what can be gained by rethinking that ceiling with the right partner.
“Foundry gives founders the ability to run or transition the business without the stressors, the backend headaches, and focus on what they love,” said William Granruth, who works in M&A/Business Development at Foundry. “Whether founders want to stay involved or exit to pursue other opportunities, we provide the maintenance and support and marry it with larger corporate capabilities, and that allows the next stage of growth.”
- You’ve Created a Brand, Not Just a Business
Your company’s financial health is an important factor when deciding when to sell your business, but if you dream of growing well into the future, you might also need to ask yourself: “Have I built a business, or have I built a brand?”
According to an extensive longitudinal study by the U.S. Small Business Administration, many businesses are financially successful, particularly within the first few years. But brands have lasting power. Granruth says certain signals point to a strong brand, like brand rank, repeat customer rate, customer satisfaction and social media engagement.
These tell-tale signs are important indicators for Foundry, a company that prioritizes partnership with founders who have built resonant brands that can endure for years. “If you’re serving your customers well and your customers are very happy with their product, we’re always going to take a second look,” Walker said.
- You’re Ready for More
Though the motivations for selling a business can be as varied as the people selling them, there is one common thread: Something greater is on the horizon. Some founders want to sell their online brand and move onto the next adventure. Some experience a happy life event, like a growing family or purchasing a new home, that requires more time. For others, their company vision has expanded, and they want the flexibility to pursue it.
“Founders may say, ‘Let me take some chips off the table, let me still be involved in the business, but let me get back to what I love to do while a larger company with more resources take care of the other stuff,’” Walker said.
The feedback from founders, according to Walker’s experience with hundreds of them, is that their top priority as a seller is finding the right “home” for their business, understanding that — no matter their level of continued involvement — their passions and ideas will be nurtured into something bigger and better.
In fact, finding the right team can also mean long-term growth that matches your ambition. “When you sell, you’re going to be recognized for the efforts that you’ve put in, you’re going to have a liquidity event, it’s going to be impactful for your life,” Granruth said, “but now you’re going to take a ride with an experienced operator who has access to capital to get your business to the next stage, and you can share part of that upside.”
The team at Foundry has identified tens of thousands of successful brands, and offers diverse experience, capital, resources and partnership. Their team is ready to help founders who are ready for more. If you think it’s time to sell your business, let’s have a conversation.
Have a look at eCommerce aggregators’ Definitive Guide for FBA Sellers in 2022 for more information.