Selling at the top.

Business Plan in a Day bookImage by Raymond Yee via FlickrLawrence Bailey of Price Bailey in Cambridge has some good comments to make about selling companies.  There is a feature in a Cambridge Evening News supplement sponsored by his firm.  He talks about four different scenarios but the one I like talks about the sale of an Internet based insurance intermediary in January of this year, 2008.

At the time, the entrepreneur felt that the time was not right and the price was too low.  Nearly twelve months on, the same person reckons the company would be worth on third of the price.  Most companies plod along working away and not keeping any eye on the value of their business.  It is understandable as it is hard making a crust.  But every company should have a business plan resource which makes them track the valuation of their company and also makes sure that it is always optimised for sale.

Twenty years ago, one entrepreneur summed it up with the phrase “We could work for another ten years and not be as well off!”.  So keep one eye on the inside and the other on the outside.  But gosh, you have to be clever to close before a market stalls – and very brave! And to have Price Bailey holding your hand!

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