Knowing When to Sell: Tips from a Naperville Business Attorney

sell, Naperville business lawyerThere are many reasons that may lead a person to start a business. Some individuals feel that they are best suited to work for themselves rather than for someone else. Others have a passion for their particular field or industry and are happy to dedicate their professional—and often personal—lives to their craft. Still others are simply entrepreneurs looking to build a company from the ground up, then selling the company for maximum profit at exactly the right time.

As a business law attorney, I understand that profitability is a great motivator. I also realize the importance of knowing when to sell so that you can get the highest return on your investment. Consider a recent example:

Razor Startup Sold to Multinational Conglomerate

About four years ago, entrepreneur Michael Dubin released a YouTube video that made fun of the hassle of shaving for men, targeting both the discomfort and the expense involved. At the same time, he announced the creation of Dollar Shave Club, a subscription service that offered mail-order disposable razors and replacement cartridges for as little as $1 per month. While many claimed that Dollar Shave Club’s products are inferior to the big name companies like Gillette, the club boasts more than three million subscribers claiming about 5 percent of the men’s razor market. At present, however, the service is not showing a profit.

This month, European consumer products group Unilever announced that it would be buying Dollar Shave Club. Sources close to the deal say that the multinational group will pay about $1 billion in cash. Dubin will reportedly stay on as CEO of the service, which will operate as a subsidiary of Unilever. He says that he was promised the freedom to run Dollar Shave Club, as well as needed resources to expand.

Is Now the Time?

The Dollar Shave Club deal serves as a strong example for business owners who are looking to sell a startup of their own. Sometimes, however, an owner may not have started with the intent to sell, but the industry environment and health of the company could make selling a very attractive option. Experts suggest considering three things if and when you are thinking about selling your company:

  • Value: Have you maximized the worth of your business? Could selling it—or a part of it—allow it to become even more valuable? If you are being offered cash or other incentives, selling could be your best move;
  • Risk: Over time, you may become tired of taking risks. As your company grows, your exposure often does too. Selling your business could afford you the security and protection you need, and, with the right terms, you can remain with your company and continue to focus on your interests.
  • Change: Are you ready to move on and do something else—possibly even retire? Starting a business does not mean it has to control the rest of your life. There is nothing wrong with selling to get the freedom to find new experiences.

Let Us Help

If you have questions about selling your company and how to know if the time is right, contact an experienced Naperville business law attorney. Call The Gierach Law Firm today at 630-756-1160. We are here to help you find the solution that works best for you.

 

Sources:

BBC

The Motley Fool

Wall Street Journal

Entrepreneur