Selling Out to Grow Up

 Selling Out to Grow Up


 By Bruce Condit

Every business owner has limitations. Nobody can do it all, all the time, and continue to grow the company. At some point an owner should consider selling out to grow. Selling out can take many forms. Some owners are happy to just sell off their company, collect the cash and move onto the next startup.

However, most owners do not want to sell out totally. They know the company can be more successful, but they also realize they do not personally have the – insert your limit here – cash, market reach, equipment, sales team, bonding, etc., to take it to the next level, even though they have the skills and experience. This is when it’s time to consider selling out to grow up.

Here’s a an example from a company handling environmental remediation services. The CEO had built a great company and had a strong track record of completing projects on time. His customers were happy and provided strong referrals. He had the management skills and team in place to grow exponentially. However, he lacked the financial ability to secure the large bonds needed to win the larger contracts that would take company to the next level. He realized that he needed to sell out to grow up.

He sold a major portion of his company to a buyer, who provided similar, but not competing services in other parts of the U.S. Selling enabled him to: personally take some cash off the table from the sale, secure the financial backing needed to qualify for the larger bonds required to win bigger contracts, expand his marketplace and take the entire company to the next level of success.

There are six times when selling out may be the best way to grow up:

  1. When the company needs more cash to purchase the equipment needed to win larger contracts or serve a growing market.
  2. When a larger sales team is needed to take the company’s services or products into another region or even nationwide. A new owner/partner who already sells in other markets or nationwide may be able to simply add to their current sales portfolio.
  3. When the production capability exists to serve more customers, but there’s a lack of sales and marketing ability to expand into new markets. A new owner/partner may be the perfect way to reach those new markets.
  4. When the company lacks the support staff needed to reach the next level. A new owner/partner may provide: legal, finance, accounting, marketing, HR, training and other support functions.
  5. When it’s time to diversify the product line or services to reach the next level. A new partner/owner may offer the perfect lineup that meets additional needs of existing clients. This enables rapid expansion of sales without adding any production capability – simply combine two successful companies into one powerhouse.
  6. When it’s time for the next opportunity in life. Many entrepreneurs are great at the startup and development of companies. However, they simply do not enjoy the day-to-day management of an established company. Selling out will monetize success and offer solid, personal funding for the next venture.

Selling out is not a bad thing, and in the case of the environmental services firm, it was simply another financial management tool to grow the company, expand into new markets, and ultimately take the company to a whole new level of success.

Consider selling part of the company. Many times it is the easiest, most direct route to the next level. Selling out is one way to move up.

Bruce Condit is a Dallas-based writer and can be reached at


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