Selling a business doesn’t have to be all or nothing. A partial sale can be a smart move in certain situations. At O’Keeffe & O’Malley, we’ve helped clients navigate partial sales that made their businesses more successful.
So when is a partial sale a good idea?
You need capital. Let’s be honest: having more money can make growing your business a lot easier. Selling a minority share to the right partner can open up new avenues of funding. A strategically selected partner can facilitate access to the capital you need for growth. Your company becomes more bankable with added equity and knowing your buyer’s balance sheet could bring additional resources.
You need expertise. It takes a real leader to know when to call in an expert. If you’re struggling to implement the framework needed to take your business to the next level, a partial sale might be a great idea. Private equity groups are usually open to acquiring with the right management in place and they can bring in the systems and other resources needed for growth. Partnering with someone who has led this kind of growth many times can make your life easier – and your business more successful.
You need some liquidity. Many people have most of their wealth tied up in their businesses. But the advice to diversify risk applies to us all – even business owners. A partial sale can be a smart way to pull some cash out of your company during a favorable market. By selling a minority share, you maintain control of your business while broadening your personal investment options. However there are more opportunities available with private equity groups if you are willing to give up control. Just remember: timing is crucial here. The best time to sell is when business is booming.
If you haven’t considered a partial sale, it can seem like a strange option. But successful businesses with positive cash flow are attractive to minority and majority ownership investors. This is especially true when earnings are more than $1 million before interest, taxes, depreciation and amortization.
A partial sale to the right partner can help your business flourish. O’Keeffe & O’Malley can walk you through the process and help you find the right partner. Give us a call at 913-648-1085 for a confidential meeting.