Entrepreneur – What Value Does Your Business Have?

Jan. 7, 2015
The entrepreneur build his business, because he had a dream. And now he should face reality!

It is probably not worth what you think it is.  There has gone a lot of water under the bridge since you as an entrepreneur started your successful venture. Sometimes time between your business start up and business succession is even 40 years, or more.

The world hasn’t stopped turning and many things have changed. A business that in the beginning did not have the smallest threat or risk, has become a risky business, in the worst case. Nobody can polish the crystal ball shiny enough, but every now and then a “health check up” for your business is worthwhile.

One good way of doing this, is putting your business for sale and let for instance a private equity buyer run a due diligence. They will be blunt enough to tell you their view on your business. Listen carefully, because it could reveal a lot issues you need to pay attention to.

Just recently, I was advising a successful a 70 years old entrepreneur. The sales had slumped. It was the first real crisis for this entrepreneur. Sales had gone down really fast, 35% in one year. He never before had to make any sales efforts, business was just coming. But he continued believing that business will come back just like that.

I managed attract a family office to make a very lucrative offer for his business, however he declined. Now the business is in an even worse situation. He thinks he can fix it himself!

So now all potential investors consider the business worthless, because so much cash is needed for investments.

Entrepreneur, think early about your successor and plan it well. Do have a plan B or even C, if plan A is suddenly not viable anymore.

There are hundreds of thousands interesting SME businesses in Europe waiting for a successor. But, entrepreneur first you have to make a decision and potentially face the music!

About the Author

R. Paul Vuolle Blog | CEO

R. Paul Vuolle's blog "The SME's Guide to European Manufacturing," has moved. You'll find his latest ideas and commentary on SME European Manufacturing on IndustryWeek's IdeaXchange. 

You'll find more articles written by Paul at http://www.industryweek.com/blog/smes-guide-european-manufacturing.

R. Paul Vuolle, CEO of Bellevue SME Advisors GmbH in Switzerland and Germany, works actively with small and medium (SME) size manufacturing companies in Europe in SCM/Outsourcing, logistics, turnaround and restructuring, market expansion, as well as succession planning and financing. He also frequently supports technology start- ups in building up their business. 

Paul has over 20 years operational industry experience in engineering, electronics, industrial automation, building automation, investment goods like electrical drives, automatic test & measurement systems, HV Transformer production systems. During his career he has worked in manufacturing industries in supply chain management, outsourcing, logistics, production, R&D and successfully selling to international large key accounts. Paul has also run a sizeable amount of M&A transactions in numerous countries around the world.

He has built up his experience working in various leadership positions and functions in large corporations, such as ABB, and having executive positions in medium-size family companies and as a technology entrepreneur.

Paul is MSc. E.E. from Swiss Federal Institute of Technology in Zürich as well as BSc.E.E. from Helsinki Institute of Technology.

Paul is a long time member of IEEE and of its Industrial Applications Society.

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