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Dear Oaklyn Consulting,
For the last five years, I’ve been making 65% to 75% gross profit. I know in the next few years, gross profit is going to shrink because of new competition coming into the market. What advice do you have for me to consider selling the business now before this competition gets their feet in the door?
From Oaklyn Consulting
First, congratulations on several years of finding a need for your business to serve where you demonstrated the value of your work through profitable sales.
Second, it’s astute to recognize that good ideas attract competition and that competition will erode margins. And to do this in time to react.
The best business owners constantly scan their competitive landscape, thinking about business combinations that will add value to their own operation or to the operations of others. For example, what competitors lose when I win and could we benefit from working together? Or what peer companies win when I win and could succeed even more by working together?
Our experience in mergers and acquisitions is that the best deals get done when the post-deal business plan is compelling to both parties, and the best post-deal business plans arise from creative entrepreneurs talking often about how they can win together.
So our advice is, yes, consider selling your business right now – and think first about exactly who the buyer will be where the combination of your businesses will be stronger against competition and serve your customers better. If you’re nervous about how to start these conversations, we can help you.
