On Selling The Business

I caught this gem over on the SpoiltChild blog and found it interesting. To summarize, a client offered to buy Alan’s design consultancy. After much soul-searching, Alan realizes that whatever the business might be worth today, the long-term value must also be respected. So, he asked for a big number, was refused, and went back to quietly running his profitable business. I say it was a good move. Nobody will ever pay what a small consultancy is really worth, because the bulk of the value is not immediately evident. It’s certainly not on the books.

I’ve had a few clients offer to buy Cogeian from me, but it always involved at least me and maybe 1 or 2 of my team coming aboard the acquirer as "consultants". Now, like Alan, I see a rosy future for this little company of mine. Hell, the present is fairly well rosy, so I imagine it’s all good form here so long as I keep doing what I’m doing. Anyway, on the occasions that I’ve had offers, I make a wild pitch, much like Alan did.

There’s certainly nothing wrong with quoting an aggressive price. I find it useful for both fending off unwanted acquisition inquiries and unwanted prospects.

It looks like Alan is doing well with his various web offerings; more power to him. Not selling was the right thing to do.