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A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
How to Buy Back the Business You Sold
There are many entrepreneurs out there who move on, selling the business they created from nothing to a larger company. The sale happens for any number of reasons: the owner just couldn’t make ends meet but there was a market for the product, the owner was ready to move on to something else, or the company had reached a plateau that only a larger company could overcome.
Often these entrepreneurs have a change of heart and want to buy their business back. Many times this is because they just can’t let go and are disappointed in the way the new owners are handling things. On the other hand, the new owners may not be as pleased with their purchase as they anticipated and may even offer to sell the business back. Regardless of the reason, an entrepreneur looking to buy back his previously owned business shouldn’t dive right back in without doing a little leg work first.
Examine the Product
Before you even consider making an offer, look how the company is currently being handled. If it still showing signs of success, great – your transition should be easier. However, this is typically not the case because the larger company that purchased your business is not going to be willing to sell if things are working well for them. First, determine where the failure in the business comes from. Is it a problem in the core of the business, a mistake made by the new owners, a collapsing market?
Next, determine how much you will need to invest in the company to bring it back to your expectations before considering the purchase. Realize beforehand that your expectations may be entirely unrealistic – after all, you created the business and won’t settle for second best. Problem is, second best may be all that can be accomplished. Put simply, know exactly what you’re getting into to make the most out of what the business can be. Just as if you were starting all over.
Be Prepared for Change
Just because the business is yours again, doesn’t necessarily mean that it can be ran the same way you ran it the first time. In fact, this is highly unlikely. Market fluctuation and technological advances make changes necessary on an almost yearly basis for any company. If the business has been out of your hands for a few years, you can almost guarantee that things will need to be done much differently.
First, you will likely have to get rid of some of your current employees in order to save on revenue and make a profit. Additionally, you may have to make other cuts, such as the distribution area or target markets, as other means to save funds. And, as I’ve always said, if the business is not online yet, you will need to find a means in the budget to start a website, even if it’s just a basic one for now. You really can’t get anywhere these days without a website for customers to rely on.
Essentially, you need to prepare yourself for letting go of how things were before and grasp the challenge of something new ahead. This may be hard to take in, since the business doesn’t seem that new to you at all, but change is inevitable when you buy back a business you sold.
• BusinessWeek.com: How to Beat Seller’s Remorse
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