You are a business owner and your company has been undergoing healthy growth for a longer period of time. So you may have reached a point where you wonder how you should continue. Your roles as director and shareholder may conflict with each other because of this. What’s the best thing to do? In this blog, we will tell you about the art of letting go.
A business owner always has to serve two interests. The first concern is that the company is flourishing. The second concern is that the shares increase in value. On the face of it, there’s nothing wrong with this. A healthy company that’s making a profit means that the value of the shares will increase automatically. But the interests may also conflict with each other. For example, if investments need to be made. Of if other radical decisions need to be taken. Whichever role gains the upper hand depends on many factors, including the phase in which your company is in.
From entrepreneur to manager
If you start up a business then you are chiefly an entrepreneur. You put your company on the map, you focus on development and innovation and you are particularly occupied with external affairs. You are creative, inventive and you’ve got guts. If your business is growing, then a variety of new challenges emerge. Because to whom can you delegate tasks? How do you let your company run as a well-oiled machine? You’ve guessed it; you’re becoming more and more of a manager. You have to focus increasingly on the internal organisation.
From manager to business owner
Of course you are and will remain an entrepreneur. But as the value of your business grows, the value of your shares will also grow. For this reason, your share capital is an ever increasing factor that you have to bear in mind. Your role as principal shareholder will therefore also become more important. And before you know it, you will have to weigh up the pros and cons. Because are you going to invest in that new machine or those new business premises? And what kind of consequences will this have for your financial position?
Working in or on your business
At Stratfield, we hold these kinds of discussions on a daily basis with shareholders and principal shareholders. We often ask them whether they want to work in or on their business. Working on their business provides shareholders and principal shareholders with the greatest yield. But then choices do have to be made. It then often comes down to the art of letting go. Perhaps you need to look for a director who is going to work in the business. That requires trust from both sides. That requires mutual understanding of each other’s visions and ideas. But don’t forget, letting something go is different from letting something fall.
One step back, two steps forward
If you have taken the decision to work on your business and have decided that letting go is the most profitable option, then it is a matter of keeping an eye on the team you have assembled from that moment. A team that consists of people who are better than you in certain areas. People who continue to work on their development, enjoy what they are doing and, in this way, help your company to grow further. This isn’t only good for current development, but also for the future. Because just imagine. You would like to sell your company later on, but everything revolves around you as the key figure. A prospective buyer will know that the results will decline as soon as you withdraw from the company. That will considerably reduce the value of your business. By letting go now, you may be taking a step backwards, but in the long term you will be taking two or maybe many more steps forward. Isn’t that a pleasant prospect?
Do you need professional support?
A professional party with experience in this field can contribute to a solution for a prospective acquisition. Are you looking for a company to acquire? Or are you perhaps on the point of selling your company? Get in touch and let us know how we can help you. You can find our contact details here.