We can’t grow. Am I being unfair to my business and employees?

Dear Aunty B,

I am stuck and am looking for some entrepreneurial advice. We travelled okay at the start of the GFC and then things took a bad turn. We have recovered a little bit though have had to face the fact that the marketplace has changed for good. We are up against two very large competitors and to compete successfully, our costs are through the roof, as we have to hire more staff to deliver more products, at a level that is better than our competitors and justifies our premium price.

When I look five years out I see us pedalling just as hard on the same old bike and probably going backwards. We also don’t have the finance to make the substantial investment that we need to go head-to-head.

I was approached a few years ago by one of the competitors but I didn’t want to sell. Now I am wondering if I am being unfair to the business and my employees? I am the majority shareholder along with some key employees so it is up to me to make the decision. We are actually more attractive to the would-be purchaser than we were several years ago but I am not sure about the future.

Undecided Dave

Dear Undecided Dave,

That’s hard isn’t it? There is simply not enough assistance given to companies like yours to get you through that medium stage and take on large companies. And with the finance situation the way it is, I fear more correspondence like yours!

Look, it may well be better if you sell out. Your company lives on, you can stay working in the business for a transitional period and your employees will have a better career path.

It is interesting that you don’t say how you feel about selling, although it seems clear that the idea of pedalling to nowhere is not attractive and you are the type of business owner who puts the business first.

Here is what you should do. Meet with your key advisers and discuss the company’s future with them. If they agree with you and the business is ready for sale, then the next step would be to have an informal meeting with the competitor who has already approached you and see if there is still interest.

But make sure you do this: it is very important that you take some time to consider your personal feelings about letting go and you plan for your own future. That way you won’t let your feelings about letting go of the business influence the decision.

You are doing the right thing so good luck!

Your Aunty B

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