Typical aspirational catalysts for and against value realization

Catalysts cropped

In our extensive experience of working with thousands of owners over the years, within the universe of owners of consulting firms you will fall into one of four groups when it comes to value realization aspirations:

  1. I’m blissfully ignorant and have not even thought about it!
  2. I will never want to sell because I have alternative business and life goals
  3. I may want to sell, but not sure if, how and when
  4. I have a clear goal to sell

If you fall into another group not mentioned please let us know what it is! Another reality is that you may oscillate between groups, depending on factors of change in your business and life. So let’s explore each group and identify the most common reasons why you may want to move up or down.

  1. I’m blissfully ignorant and have not even thought about it!

You’re in this group because you genuinely didn’t realize it was possible to sell a consulting firm, or you haven’t yet taken the trouble to discover the art of the possible in any detail. Owners in this group are typically running early stage firms, or stuck at the smaller end of the business scale. But not exclusively. You may be sitting on a large asset worth something, the thought has never crossed your mind and something may have changed, like a desire to retire more lucratively without switching off the office lights and throwing the keys away. Consider your options to move into one of the next three groups if you want to eliminate or include the opportunity to build a saleable asset, or capitalize on what you’ve already built.

  1. I will never want to sell because I have alternative business and life goals

The most common reason for being in this group is because you’ve already decided that you want to run a lifestyle business where your exit strategy is to switch off the lights and leave it all behind. You may not want the hassle of value creation and all that comes with it in building a professionalized business attractive to acquirers. Another common reason is that your company mission and values are more cooperative, not for your own gain, but the greater good of all employees and customers. If you don’t feel comfortable in this group, move up to group 3 or 4.

  1. I may want to sell, but not sure if, how and when

You’ll probably be in this group for one of two reasons. You’re on the fence and undecided about whether to grow and sell, or run a lifestyle business. Or you are decisively in this group because you’ve chosen to run your business as if it’s for sale, in order to keep all options open. In the latter case, you know that by running the business this way the by-product is greater rewards for shareholders, employees and clients on the journey to an exit decision, whatever and whenever that may be. If you’re on the fence, you need to decide to decide! Better to drop down to group 2, because you will feel a great release! Alternatively you could go for it and join group 4.

  1. I have a clear goal to sell

If this is where you’ve slotted your aspiration, it’s typically because you’ve built to sell and the company is demonstrably sale ready now, or you have a ready and willing buyer, or you’re an entrepreneur on a value growth journey with clear value and timescales in mind. It’s not uncommon for owners in this group to drop down to group 3 before re-joining group 4! Usually because you’re having so much fun and don’t want to stop, or you believe you can double again before deciding what to do. It could be because the business is so cash rich that a liquidity event is inferior to what you can take out over the next few years.

Shifting between groups is normal, as is a fixed position, but in order to avoid disappointment this is better by design than vacillation or serendipitous forces. Disappointment comes in the form of lost opportunities, missed expectations, money left behind, unrealizable retirement or entrepreneurship plans. The only upside about not knowing what group you want to finish in is neatly framed in the quotation: “The nicest thing about not planning is that failure comes as a complete surprise and is not preceded by a period of worry and depression!”

It would be interesting to hear your story and how you may have moved between groups, so it would be lovely to discuss your aspirations and perhaps provide some insights that help you slot into the most appropriate group, or move out of a poor choice into a better one. Please get in touch.

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