Usually the owner of a company is engaged with the development of his company for decades. Being stuck with their routine of daily activities, often people do not think about the fact, that human life is limited and one day they must transfer their businesses to new owners, who are full of will-power and enthusiasm.
It is paradoxical that very good entrepreneurs are often unable to make a crucial decision for themselves and for their businesses at the right time. It might be because of the fatherly care, entrepreneurial adrenaline or unconscious fear for retirement years ahead. However, none of us lives forever and the ability to work decreases gradually with increasing age, also the motivation might decrease. Quite often the corporate governance is given away along with the family line. For example, one of Swedish leading clothing retail chain H&M is under control of third generation 34-year-old Karl-Johan Persson who is the founder’s grandson. There are plenty of examples even in Estonia – logistics company DBT management was successfully taken over by owners son after his father`s death; Männituka Farm LLC owner gave his company management to his daughter; Hinnapommi owner Sulev Kodu trusted his company management to his daughter.
However, not always family members and offspring have the desire and necessary skills to take over the management of the company. The alternative is to sell the company to existing management or other market participant, because often the best buyers are competitors. There are more options – sell part of business to a financial investor (to develop business with partner and exit together after 5 years) or sell core part of the business, leaving e.g. real estate to produce cash flow.
There are many options but of course the most important is to recognise the necessity and timing of the sales. To find the most suitable solution for you it is always good to ask advice from those who have more experience in this field. Keeping in mind that successful sales process might take long time. In the experience of Investment Agency professionals the sales process including the sales preparation work might take up to three years.
Investment Agency is organising in cooperation with Estonian Chamber of Commerce on the 20th of November a seminar in the matter. To find out more information look here : http://www.koda.ee/koolitused-uritused/koolitused/?id=22524
Illar Kaasik, Investment Agency OÜ partner