Sold your business, yet want to ensure its smooth functioning? Become an investor in your own company.
We had already covered the various stages of business ownership in one of our previous blogs. It is common for many business owners to feel the need to step back and enjoy the peace that comes with not having to shoulder all the responsibilities that are integral to running a business.
However, they also feel accountable for the future of their hard-earned business establishment.
This is the phase where the business has peaked and plateaued which implies, the returns are hefty and consistent. Read on to understand how you can smoothly shift positions from being a business owner to being an investor.
How can business owners in the final stage of business ownership (maturity), plan an exit strategy without really exiting at all? The solution is straightforward and effective – sell it to a potential buyer while retaining your grip on its operations by becoming an investor in your own business.
Firstly, sell your business plan to a potential seller. As in, make a proposal that includes the clause about you staying back as an investor and retaining some authority on how the business pans out even post your exit as the owner.
This will give you the benefit of being a part of the business growth and its profits without really getting into the nuances of the business operations.
The financial rewards will be consistent with the added satisfaction of passively running your organization under your terms.
Every business has its phases. Being an investor can also let you focus on bringing in other investors. You can work to find angel investors or other potential business investors for any expansion plans and/or need for greater financial support owing to growing market demand. Thus, contributing to the growth of your company from the outside.
You can also share your insights and put across your pointers for optimizing operations and other aspects of the business with long-term effects. This can greatly aid the current business owners, as you already have in-depth knowledge about the business.
• Financial leverage
• An opportunity to oversee your business without the usual hassles in the position of a stakeholder.
• No need to spread out yourself thin over the ongoing business concerns that affect your life – financially and personally.
• It offers a comfortable and a much less volatile lifestyle
• More time on hand to spend on other activities that may or may not be of a professional nature. This includes – focus on other business opportunities/projects, recreational activities, more focus on health-related activities, more time with family that was a neglected aspect of your life so far, etc.
The decision to sell or hand over your business is not just a strategic decision but also an emotional one. It is not easy to watch someone take on the reins and operate your business in their style. Hence, for business owners who are deeply invested in their business and want to make the tough call of stepping back as the owner, the option of retaining some semblance of ownership and influence in the running of their business is possible in the form of an investor. Investments are also a risky yet rewarding ball game. But becoming an investor in your own company post a buyout can be a business owners’ ideal exit dream.