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Does it make sense to create a Georgia company just to sell it?

On Behalf of | Jul 10, 2019 | Uncategorized

Short answer to that blog post headline query posed immediately above: it might.

Legions of out-of-the-box thinkers take the long view regarding their business creations, of course. They worked hard and passionately – and with notable smarts and creativity – to spawn a cutting-edge commercial idea and nurture it to a point of further viability. They aren’t about to step back at the verge of company formation.

Indeed, many smart entrepreneurs especially relish the moments surrounding startup. Their business is their baby, and their creative juices are fueled by next-step considerations focused on how to optimally guide their enterprise far into the future. For them, working closely with an allied team of professionals to craft strategies relevant to entity selection, asset acquisition, financing, employee recruitment and profit-geared business operations is flatly energizing.

Candidly, though, that euphoria is not universally shared among business creators. For some select entrepreneurs, the recipe for commercial success is tied less to the continuous steering of an enterprise ship than it is to being untethered from its anchor.

Put another way: Some company architects want to cut cords and transition to other things once they have generated a commercially feasible idea. Their fundamental joy derives from the creative process rather than from being proactive business managers into the future.

A recent Forbes article duly notes that, “For some entrepreneurs, there’s a point where you’re just done and ready to move on.”

Getting acquired: Might that be a feasible business strategy?

Although building a small business to the point of inception and then seeking to sell it might seem a counterintuitive proposition, it can often make strong sense for company principals. Here are some reasons why:

  • Your joy is in the creation, not the details
  • Your creative energies have turned toward other ideas and opportunities
  • A major player is either threatening or enticing you with acquisition overtures
  • Selling could reduce material debt and secure liquidity for other ventures

Those are just a few determinants that can loom large for an entrepreneur in a given case. The above Forbes piece duly stresses that closely contemplating them implies a creator’s timely self-awareness and need to think dispassionately about the future.

How can an entrepreneur position for a successful business sale?

Be proactive. Get noticed. Shine up the company particulars. In other words, Forbes notes, “actively position your company to fill a gap in the market and attract an offer.”

If that seems easier said than done, entrepreneurs in Georgia and elsewhere should confidently note that actually building a business idea and enterprise with acquisition in mind is a proven strategy that often breeds success.

Compiling an experienced team of advisers and niche professionals (established commercial law attorneys especially, with input from seasoned accountants and other parties often being beneficial as well) is also a key component that can drive a successful sale.

Ultimately, many entrepreneurs who live for the creative process and wince at the prospect of day-to-day management decision making should embrace rather than fear the prospect of acquisition.

It can sometimes turn out to be their best friend.


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