Think about exiting the business you’ve built up? You might be wondering whether you should merge or sell.
When it comes to the merging vs. selling debate, there’s no one-size-fits-all answer. You’ll need to think about your unique situation and how willing you are to be involved in day-to-day operations.
So, when you ask yourself “Should I merge or sell my business?” think about your preferences and goals. Let’s take a look at your options.
Selling a Business Outright
When you sell a business outright, the buyer typically has full ownership. The two of you agree on a price and terms. Then, you hand over the reins completely after a transition period has passed.
This option is a good fit if you are:
- Ready to retire
- Looking to try something new
There is usually a handover period during which you’ll help out the new owner and your team as everyone adjusts.
Partial Sales
With a partial sales, you sell just part of your business. The rest you keep. You secure some cash now, but still have ownership of a share of the business.
This can work well if you’d like some financial security but aren’t ready to step back yet. It’s also a good option if you want a partner to help fund growth.
Merging a Business
Merging a business is not quite a partial sale. Your business joins a larger group or company. You keep the same team and your well-earned reputation.
After a merger, you might get extra support with hiring and back-office admin. That can give you more time to do the work you enjoy.
Benefits include:
- Help with payroll and admin
- Access to bigger contracts
- Group buying power on equipment and supplies
- Room to grow with shared resources
There can be risks. For example, you’ll share decision-making with the wider group, so some things might work differently from how you’re used to. Integrating systems can also be time-consuming and require a steep learning curve.
What About Staying On After Acquistion?
With a merger or partial sale, you can often stay on after the deal closes. You might move into a role like operations lead or senior advisor.
Questions to ask yourself
Before you decide whether you should sell or merge, ask:
- Do you want to work in the business day to day?
- Would you like to share in future growth?
- How soon do you want to step back?
- Who do you want looking after your team and clients?
If you’d like to keep a hand in things, a merger or partial sale might be best. If you’re ready for your next chapter, selling outright could be the better fit.
By Owners, For Owners
Whether you merge or sell your business depends on how involved you want to be moving forward. Selling outright gives you a clean finish and an opportunity to retire or try something new. A merger or partial sale allows you to stay involved in your business.
When you’re clear on your goals and know exactly what you want to achieve, you can make an informed decision.
Want help in the process?
At The Batallan Group, we acquire landscaping, painting, and facility maintenance companies across the Southeastern US. Our approach is centered on building and improving what you’ve worked so hard to create so it lasts as a legacy for the next generation.
If you are curious to know more about selling a business, contact us. Let’s get the conversation started.