I had the pleasure of participating on a panel discussion at the recent NAPEO 2018 Annual Conference and Marketplace around this very issue: grow your business or sell? My other panelists and I were allowed to share our thoughts relating to the question, as well as pose questions to our audience.
We all know these two constructs are not mutually exclusive, so there are no ultimatums! They are both (inherently) good questions and worthy of exploration. Here are some of the items I asked the audience to think about:
What is “growth”?
With a finite amount of time (526,000 minutes in a year) and a finite amount of capital (fill in the blank), too many companies continue to spend a significant amount of this time on unproductive opportunities, target markets (that don’t fit our profile and are thus unqualified) and other initiatives that don’t generate growth. So, is it then safe to say, that too many companies are incorrectly answering this question of growth The fact is, the fastest way to profitable growth is right under our nose. Here are a few facts to consider:
- It costs 6-7X more to sell a new customer than sell into anexisting customer (Bain & Co.)
- Service and support is the most important buying factor: twice as important as price. (McKinsey)
- The probability of selling to an existing customer is 65-70% while the probability of selling to a new prospect is 5-20% (CSO Insights)
If I decide to sell, what is the value proposition to me?
Understanding that this is a personal decision as well as a business decision is important. There are questions that only you will be able to answer and the answers will not come from a spreadsheet. The point here is that one must consider all of the personal items first and then make a decision to either go or not go into a sales process. Nothing will hold you back like a good second guess every few days! This is an extremely important decision so take your time and consider what is most important to you and your family. What do I wantmy life to look like post close? Only you can answer these questions and being honest in this realm is vital.
Entering into a process is a two-way street. As a seller, you are also performing your own diligence on the buyer and have a responsibility to challenge at any part of the process. Stay close to the process and never… ever abdicate any part of the process to staff or outside counsel – it is up to you to be intimate with every facet of the requests, positions, plans, contracts, etc. You own this one!
Thanks to NAPEO and my fellow panelists. This was a very rewarding opportunity and I appreciate your interest in my perspective.