With vast sums changing hands for everything from apps to chocolate, it’s no surprise that The Essence of Enterprise Report, published by HSBC Private Banking in 2017, found that a full 39 per cent of business owners around the world were considering an exit in the near future. This number rises to 58 per cent in the UK, and 49 per cent in both Singapore and Australia.
On the other hand, while a high number of entrepreneurs see the culmination of their efforts in a successful sale, it's understandable that many more prefer to stay in charge of their enterprises. Regional differences come into play here, with the same report finding that only 17 per cent of business owners in Saudi Arabia, and 14 per cent in Mainland China, had ambitions to move on. On top of this, entrepreneurs across the board are keen to stress that setting up a business is hard. It demands commitment at a very personal level, which is fundamentally at odds with the one-foot-out-the-door mentality of someone merely looking to sell.
More surprising then are the serial entrepreneurs, who undergo this whole process repeatedly. Interestingly, the reason they keep coming back for more is not their drive to sell – rather, it's the ambition to grow businesses with so much potential that buyers inevitably start queuing.
In 2009, Ian Smith co-founded Butterfly Software, an advanced data analytics business. In 2012, Butterfly was acquired by IBM and Smith went on to found Gospel Technology, where he is currently CEO. Smith did not originally set out to become a serial entrepreneur: "Our objective was not to sell a business – it was to build a great software company, which is what we did and why we were attractive to potential buyers."
Of course, handing over a business that you've put so much of yourself into is not easy. That said, it's not rare either. According to Mark Winterflood, global head of collaboration at HSBC Private Banking, at some point on an entrepreneurial journey, the thoughts of many business owners and creators will turn at some point to the final destination. "For many, that desired end-game will be leaving the business on their own terms," he said.
As soon as business owners start to consider this option, it is important that they have a plan, both professional and personal. Russell Prior, Head of Family Governance & Family Enterprise Succession at HSBC Private Banking notes that "the personal impact of exiting and indeed selling your business is something that entrepreneurs often miss altogether." When your business has been your life's work, Prior advises, it's even more important to think about what you'll do afterwards.
William Kendall agrees: "When you sell a business that you put everything into, it leaves a big hole in your life." He built up The New Covent Garden Soup Company to the point that its sales were in excess of GBP20 million before selling it in 1998. In his case, his primary objective was not to sell his business, but help continue to make it thrive.
Eventually, the day came when it was in the best interests of the business for it to advance under new ownership: "The business was getting harder and harder to grow," Kendall says. "We had a great success building it up but it was going to become more expensive in marketing to take it to the next level. So, it was an obvious time to bring in a new owner."
Kendall sold the business without a plan for what to do next. But, he says, "we were too young to retire so we set out looking for a business that we could turn around". The answer came in the shape of Green & Black's, the chocolate company that also became a huge success before it was sold to Cadbury in 2005.
This compulsion to keep moving is echoed by Toni Ko. Having sold her company NYX Cosmetics to L'Oréal for USD500 million in 2014, she found herself suddenly at a loose end, telling online magazine Makers: "I felt joyous, sad, miserable, defeated, triumphant, happy, then back to feeling miserable and defeated over and over again."
Retirement at 41 didn't sit well with Ko, who launched her new company, sunglasses brand Perverse, last year with plans to open 125 stores in the next five years. Even while warning that "it's important for entrepreneurs to prepare themselves for the emotional aftermath of their departure," Ko is now proud to declare herself a serial entrepreneur.
Kendall strikes a different note of caution. He has spoken publicly of his seller's regret – also not that rare among entrepreneurs – over parting with Green & Black's, which this year launched its first range of not-Fairtrade, not-organic product line – a stark contrast with the values the brand was built on. "It's a British disease," he told The Telegraph in 2015. "We say, ‘Look at that guy; he sold his business for GBP300m.' We don't say, ‘See that guy; he employs 500 people.'"
This serves as a reminder that success for entrepreneurs is measured not by the sale, but by the experience – which may well be a lifelong one. As Smith says, it's not about pursuing goals, it's about the journey, which continues with each new company. "In fact, going through the experience of building a business again has made me realise that I have so much more to learn."
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