It’s a common finance principle that all your eggs should not be in one basket. But, so many business owners completely disregard this principle, even though it’s a universal and proven way to reduce risk.
Allow me to paint a picture. Let’s imagine you were climbing a rocky, slippery, and formidable mountain. Sure, that’s a difficult endeavor by itself, but what if you had to climb it with a basket of six eggs? And that’s not all. Those eggs were your source of food, and therefore, strength for your climb. Would you carry them all in one basket, or would you carry them separately?
Business is like that formidable mountain. Sometimes it’s easy, but typically business brings significant risk and challenges.
After many years of building their company, business owners are often tired and ready to move on. Some are really excited about a new venture or spending more time with family, but others make excuses for not selling even when it’s important that they do.
One excuse we’ve heard is: “I’m uncertain about investing the money post-sale.” And that’s understandable. Uncertainty is not something to ignore. But should uncertainly keep you from selling?
Here’s the thing: I’m fairly confident that no one could convince you to invest all of your post-sale cash proceeds in a medium-sized, privately-held business, even if you were given a controlling interest. And honestly, that’s probably where you are at right now.
Ask yourself: Would you do that? That’s what you’re doing when you decide to keep your assets tied in one company. Is that a risk you are willing to take?
Don’t let the uncertainty of the market allow you to pass on what could be the best opportunity to sell and achieve your strongest and lowest risk financial position ever.