That sound you can hear is the long-predicted tidal wave of business sales finally hitting the shore.
In the last three days, we’ve seen three entrepreneurs sell up, including:
- Travelcorp founder Helen Logas, who sold out to Jamie Pherous’ Corporate Travel Management.
- Adir Shiffman of Helpmechoose.com.au, who sold to Mortgage Choice.
- Franchise veteran Steve Hansen, who sold his Chooks Fresh & Tasty franchise to Quick Service Restaurant Holdings.
A coincidence? I think not. Talking to entrepreneurs at a number of recent business gathering of late, it’s clear that exits and succession are very much front of mind.
It’s hardly a surprise. While many entrepreneurs have been examining exit options for the last few years, the GFC has meant that they simply had to stick with their businesses and steer them through the downturn.
But with the economy growing, and larger companies looking for growth options, entrepreneurs are clearly ready to sell up if the price and opportunity is right.
There are a few things driving this, from what I’ve seen. In some cases, the entrepreneurs can see the chance for an early and hard-earned retirement.
In others, there is a clear sense of burnout, particularly after the GFC.
In some of the tech sector sales, there is also a sense that intense competition and the size of the Australian market means you need to get big, or get out. And if you can get the right price, getting out looks pretty good right now.
One word of warning for entrepreneurs looking to get out in the next little while – beware the clauses that might be part of the sale process.
Companies on the acquisition hunt remain relatively cautious and will be looking to use earn-out clauses with performance hurdles to ensure they are getting their money’s worth.
These earn-out periods can be very difficult for some entrepreneurs to handle, particularly if they have lost control of the decision-making process.
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