Research by John Warrillow, Built to Sell author, shows that entrepreneurs aged 32 and under are more than twice as likely to sell their businesses than older business owners. The reasons for this are explained in John’s blog, but here’s a summary of the reasons why businesses owned by younger people tend to attract more offers (using John’s rather cryptic terminology!):
1. ‘Nitrous oxide’- Bringing in super-charged, youthful entrepreneur’s energy to the acquiring business
2. ‘Acquihires’ – Buying for the (generally younger) people in the business, not the products or IP etc.
3. ‘Inertia’ – Delaying a sale past the peak of the business’s life cycle with older businesses
4. ‘Facebook’ – Harnessing the power of social media and new marketing methods for a competitive edge
In my experience of dealing with business owners, young and old, point 3 particularly resonates. I have seen countless businesses become over-ripe, and their owners become complacent, assuming that they can coast to retirement or sale.
They end up with dated products, branding and technology. They fail to bring in new blood, or fail to empower the new blood, so that the profits and the value of the business inevitably decline.
One of the reasons that we promote employee ownership as a key strand of our ISOP planning is that engaged, motivated employees can prevent this from happening – the business founder does not have to struggle constantly to be the only source of ideas and energy.
Where are you in your business life cycle, and are you ready to let others help drive the business forward?
Here is John’s full article.