"Dutch SME entrepreneurs would rather not sell their businesses to a foreign buyer." I read this regularly. It’s strange, because it doesn’t align at all with our practical experience. SME entrepreneurs simply want a good deal—for themselves, for their business, and certainly for their employees as well. And that’s precisely why they’re increasingly turning to foreign buyers.
From Hesitation to Rational Choice
Of course, we recognize the initial hesitation. Right at the start of a process, we often see a combination of cold feet, discomfort with the unknown, or strong preconceptions. But those beliefs rarely turn out to be accurate later on. Foreign parties often pay better, act based on broader strategic interests (such as gaining market position), and think on a larger scale thanks to more substantial capital reserves. Moreover, employees often get the chance to gain international experience, and the business receives a boost from new technologies, patents, and market access.
As soon as these benefits are substantiated by genuine interest, the entrepreneur’s mindset shifts. A logical, rational preference for the best deal on paper emerges. The selection of four to seven personal introductions that we present to entrepreneurs now almost always consists of 30 to 60 percent foreign parties. This applies just as much to smaller SMEs.
Foreign buyers play a fundamental role in the sales process regardless of the outcome, even if the final choice falls on a Dutch party. A well-managed process encourages candidates to pull out all the stops as they compete with one another.
Furthermore, a party with significant strategic interests will be more likely to accept better terms for a director-owner who remains with the company and will be more flexible during negotiations. And is your ideal scenario to continue operating with relatively broad entrepreneurial freedom on a larger, international stage? If so, consider the advantages of a parent company that’s based overseas and heavily reliant on you as its local representative.
Always choose from all options
Our philosophy is simple: you have to present SME business owners who are selling their companies with real choices. After all, sell a business is one of the most important transactions in an entrepreneur’s life. That is precisely why a careful assessment must be made between domestic strategic buyers, investment firms, a potential management buy-in (MBI), and foreign parties. Only then can a complete picture of the possibilities and the various acquisition structures emerge.
Whether you want to keep pushing hard for a few more years or your business partner wants to call it quits, there are countless scenarios in which you can secure a portion of the accumulated capital and use another portion to keep the business going.
So it pays to examine preconceptions beforehand. After all, if there’s one common thread in our practice, it’s that the outcome almost always turns out differently than the business owner had anticipated. And that certainly applies to the opportunities offered by a foreign buyer!
