Selling a Business – A Profitable Experience

 

 

Over the past few years we have seen quite a few huge companies sell their business or part of their business. Most of us remember the recent acquisitions: WhatsApp and Instagram sold to Facebook; Tumblr to Yahoo; Waze, Picasa and QuickOffice   WhatsApp business  to Google; Nokia and Dell to Microsoft, and the list just goes on even beyond the technology department.

When such huge companies or simply rights to a huge product can be sold and made profit from, why are people afraid to do the same while selling their businesses on a smaller scale? It’s about time we broke the barrier that forms with the thought that selling a business is taboo, because out there you can sell your business. With profit, that too!

Selling your business was always considered a bad move, a move that defines the end of a company, but it is nothing more than just a myth. Case in point, Mr. Girish Patel, Founder and Chairman of Paras Pharmaceuticals Ltd did exactly that – he sold the company for a whopping Rs.3,260 crore.

Paras Pharmaceuticals, one of India’s leading pharmaceutical companies leading in FMCG (Fast Moving Consumer Goods) and OTC (Over The Counter) segment had established its base in household items with brands like Moov, D’ Cold, Dermicool, Itch Guard, Krack and so on. In December of 2010, the company with one of its two production units was sold to UK based Reckitt-Benckiser Group of which Girish Patel was 30% stakeholder. That makes him receivable of almost Rs.900 crore.

During an interview after the announcement of the sell-off, Mr. Girish Patel talks about what he plans to do with the money. Not wanting to go back in the FMCG or OTC market, Mr. Girish decided that he will simply invest his money in family-owned companies and help them turn around to professionally-driven ones. The logic behind it is simple. With his knowledge and experience, he would greatly be able to help these companies grow, and when he has played his role in bringing up the company, he will exit, also making a chunk of profit with his share in the company.

This shows how selling business isn’t what it is made it out to be. Neither is selling a business bad, nor is it the end of the company. It can often mean a lot of profit for the seller and even better future for the company on sale.

The worth of a business is decided by the quality, the dedication, the output and how the company functions. So if the company does not compromise on any of the above, you have a good probability of successfully selling your business, most likely in profit. Also, when you are selling a business, you are creating better opportunities for the company itself, giving it more space to grow.

 

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