Sell or Hold: Criteria for Smart Decisions

Let’s get honest: letting go is hard. A third-generation owner once told me he felt more defined by his founder identity than his actual name. That’s the secret no one wants to say aloud—the choice to sell, hold, or pass on a business has more behind it than spreadsheets and market charts. When a founder relies on gut instinct and adrenaline during pivotal moments, regret lurks. That’s why, this time, we unpack how to create your own bulletproof Sell/Hold criteria, long before emotions and market headlines try to sway you.

Mistaking Gut Instinct for Strategy: Wild Tales from the Trenches

It’s a scene many business owners know all too well: a late-night email, a sudden market dip, or a heated family argument. In these moments, gut instinct can feel like a superpower—an adrenaline-charged urge to act, sell, or hold at all costs. But as the stories from the trenches reveal, relying on instinct alone can lead to costly mistakes and lasting regret.

The Split-Second Decision That Almost Cost a Family Legacy

Consider the story of Tom, a second-generation founder who faced a surprise buyout offer after a tough quarter. Exhausted and frustrated, Tom nearly accepted the deal on the spot, convinced it was a sign to move on. Only a last-minute call with his advisor stopped him from signing away his family’s legacy. Tom later admitted, “I almost let one bad month erase decades of work.” His near-miss highlights how emotional decision-making can threaten even the most established businesses.

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From Sleepless Nights to Regret: The Trade Sale Tale

Another cautionary tale comes from Lisa, who, after a string of sleepless nights and mounting pressure, agreed to a trade sale without consulting her formal exit strategy. The deal closed quickly, but the aftermath was bittersweet. Lisa struggled with her founder identity and later confessed she wished she’d paused to review her own criteria for success. She’s not alone—an industry survey found that 87% of post-exit founders express regret about the timing or manner of their exit. Many wish they’d defined their own “sell/hold” criteria before letting emotions take over.

Why Gut Instinct Isn’t a Strategy

Financial advisors consistently warn that regret often follows emotional decisions. As Simon Sinek famously said:

“Your business is not your baby. It’s your client.”

Yet, in the heat of the moment, it’s easy to misread common triggers as signs to act:

Sudden market dips—temporary volatility mistaken for long-term decline
Family drama—personal stress clouding business judgment
Big cash offers—the allure of a windfall overriding strategic planning

These triggers can tempt even seasoned founders, but adrenaline-fueled decisions rarely lead to optimal outcomes. Instead, experts recommend building objective, written criteria for selling or holding—a process outlined in resources like Business.gov.au’s exit advice. This structured approach helps defuse impulsive exits and supports avoiding regret later on.

Defining Success: The Power of Pre-Defined Criteria

Industry data from the Australian Securities Exchange and London Stock Exchange reinforce the importance of formal, contractual criteria. By writing down financial thresholds, family readiness, and personal goals, founders can identify true trigger points—not just emotional reactions. For further support in crafting your own “Sell/Hold” document, consider expert guidance from FBRC or sign up for tailored advice at Evaheld.

Money Talks: Setting Financial Thresholds and Market Triggers

When it comes to deciding whether to sell or hold your business, money must speak louder than emotion. Setting clear, objective financial thresholds and identifying market triggers are essential steps in building a rational, strategic decision framework. This approach not only protects shareholder value but also ensures you’re not swayed by stress or fleeting opportunity. As Warren Buffett famously said:

'Valuation is not a science nor an art. It’s a negotiation.'

Decide Your ‘Walk Away’ Price: Calculated, Not Imagined

Your walk away price should be grounded in a robust business valuation—not wishful thinking. Start with the basics:

Discounted Cash Flow (DCF): This method projects future cash flows and discounts them to present value, offering a realistic view of what your business is worth today.
Market Comparables: Compare your business to similar companies recently sold or listed, using resources like the Australian Securities Exchange (ASX) or London Stock Exchange (LSE) for up-to-date valuation data.

Document your minimum acceptable price in a formal “Sell/Hold” policy. This number should reflect not only your business’s intrinsic value but also your personal financial goals and future plans.

SWOT Analysis: Risk Management and Liquidity Event Readiness

Objective financial thresholds are only part of the equation. A thorough SWOT analysis—Strengths, Weaknesses, Opportunities, Threats—helps you understand:

Risk Management: Are there looming risks (regulatory, market, operational) that could erode value?
Customer Concentration Risk: Is your revenue dependent on a handful of clients?
Liquidity Event Readiness: How quickly could you execute a sale if the right offer comes?

Industry data shows that a liquidity event—from initial decision to completion—typically takes 3 to 9 months. Planning ahead ensures you’re ready when opportunity knocks.

Shareholder Value vs. Brand Legacy

Sometimes, the numbers and your vision for the brand’s future don’t align. If maximizing shareholder value means selling to an acquirer who may not preserve your legacy, you’ll need to weigh what matters most. Objective criteria help clarify whether to hold for legacy or sell for liquidity.

Market Signals and Valuation Resources

Keep a close eye on market trends. The ASX and LSE provide valuable data on sector performance and comparable deals. Regularly benchmarking your business against these trends helps you time your exit for maximum value.

Tax Implications, Reinvestment, and Post-Sale Life

Before making any move, understand the tax implications of a sale. Early planning with advisors ensures you’re not caught off guard. Consider how you’ll reinvest proceeds and what your post-sale life will look like. For tailored exit advice, visit Business.gov.au or consult with experts at FBRC.

Ready to formalize your criteria and take control of your business future? Sign up for expert guidance on building your “Sell/Hold” document today.

Family Readiness vs. Founder Identity: Who’s Really at the Helm?

For many business owners, the decision to sell or hold the family business is deeply personal—often tangled in legacy, emotion, and identity. Yet, as John Ward famously said,

‘A family business is always one dinner conversation away from transformation.’

When it comes to succession planning and generational transfer, the stakes are high. According to Family Business Australia, a staggering 42% of family businesses lack any formal succession plan. This oversight can lead to fragile handovers, risking both the business and the family’s legacy.

Generational Transfer Hurdles: The Family Council Meltdown

Picture this: a family council meeting erupts into chaos over Sunday dinner. One sibling wants to modernise, another clings to tradition, and the founder hesitates to let go. This real-life scenario is all too common. Family readiness—the ability of the next generation to step up and the willingness of the founder to step back—often determines whether the business thrives or falters during transition.

The Tough Chat: Legacy Dreams vs. Family Consensus

Founders often see the business as an extension of themselves. Their personal goals and dreams for the company may clash with the family’s collective vision. This is where a formal Sell/Hold Criteria Document becomes essential. By defining objective triggers—such as financial thresholds, market conditions, or leadership readiness—owners can avoid emotional, spur-of-the-moment decisions. For practical guidance, the Family Business Resource Centre (FBRC) offers succession planning playbooks tailored to these sensitive conversations.

Easily send, request, and share content in your free Evaheld Legacy Vault — collaborate with family, friends and trusted advisers in shared or private spaces and keep everything organised, secure, and accessible anytime.

Employee Considerations: The Human Side of Succession

When the baton finally passes, what happens to your people and the broader community? Employee considerations and community impact are often overlooked in the rush to finalise a deal or handover. Ethical succession means safeguarding jobs, maintaining culture, and ensuring continuity for suppliers and customers. These factors should be part of your written criteria, not just afterthoughts.

Best-Kept Secrets from Business Brokers and Legal Advisors

Start Early: Begin succession planning years before you think you need it.
Use External Facilitators: Neutral advisors can mediate tough family discussions and keep everyone focused on shared goals.
Document Everything: A written succession plan, reviewed annually, reduces misunderstandings and emotional flare-ups.
Leverage Market Insights: Consult resources like the ASX and London Stock Exchange for market timing and valuation benchmarks.
Exit Advice: Government resources such as business.gov.au provide step-by-step exit planning tools.

Building Your Succession Framework

Family consensus and readiness are as critical as financial performance. Use proven frameworks from fbrc.com.au to create a succession plan that balances founder identity with family and employee needs. And for further support, sign up for expert insights at Evaheld.

The Written Rulebook: Crafting Your Sell/Hold Criteria Document

Every business owner faces the pivotal question: should you sell your business or hold on for the next chapter? The answer is rarely simple, and emotions often cloud judgment at critical moments. That’s why a decision framework—a written, objective “Sell/Hold Criteria Document”—is your best safeguard against rash, poorly timed decisions. As Howard Marks wisely said,

“You can’t control the market, but you can control how you make decisions.”

What Belongs in a Sell/Hold Criteria Framework?

Think of your criteria document as a strategic rulebook. It sets the ground rules before you’re swept up in the excitement of a booming offer or the stress of a market downturn. Here’s what to include:

Strategic Criteria: Define your long-term business vision. Are you aiming for a specific revenue milestone, market share, or innovation benchmark? These strategic goals anchor your decision-making.
Financial Thresholds: Set clear numbers—minimum acceptable sale price, EBITDA multiples, or cash flow targets. Use resources like Business.gov.au for exit advice and valuation benchmarks.
Scenario Analysis: Map out “what if” scenarios. What happens if a key customer leaves, a competitor enters, or the market shifts? Scenario planning helps you prepare for both opportunity and risk.
Agreed Trigger Points: Identify events that automatically prompt a strategic review—such as a major industry change, family succession readiness, or unsolicited acquisition offers.
Contractual Criteria: Include any legal or partnership obligations that affect your ability to sell or hold. Consult with legal advisors to ensure compliance.

How to Gather Input: Don’t Fly Solo

Building a robust sell or hold criteria framework is not a solo project. Involve your board, family stakeholders, and trusted advisors:

Board and Family: Align on shared goals and readiness. Family business consultants like FBRC can facilitate these conversations.
Legal and Financial Advisors: Seek professional input on market conditions, risk management, and compliance. Explore market data from the Australian Securities Exchange or London Stock Exchange for context.

Sticking to—and Updating—Your Criteria

Even the best framework is only as strong as your commitment to it. Schedule an annual strategic review to revisit and update your criteria. This proactive planning ensures your decision process evolves with market conditions, business growth, and personal goals. Scenario analysis should be a regular agenda item, not just a one-off exercise.

Embedding Risk Management and Diversification

Objective decision-making means considering portfolio diversification and risk management. Your written criteria should reflect your appetite for risk, the role your business plays in your broader financial picture, and your exit strategy options.

Ready to build your own decision framework? Sign up for expert-led workshops at EvaHeld.com and take the first step toward confident, objective business decisions.

What Comes After: Finding Purpose in Post-Sale Life (or Redefining 'Hold')

For many business owners, the journey doesn’t end at the closing table. In fact, the period after a sale—or even after a decision to hold—can be just as critical as the years spent building the business. Yet, research shows that 58% of entrepreneurs regret not planning for post-sale life within a year of exit. This statistic highlights a crucial gap: post-sale planning is often under-rated, and a lack of direction can lead to dissatisfaction or regret. The art of letting go is not just about the transaction; it’s about crafting a new chapter, whether that means embarking on a new venture, focusing on wealth diversification, or redefining your personal legacy.

After an exit, strategic review becomes essential. This is the time to make space for personal goals and to consider how your new wealth can be diversified. Portfolio diversification is more than a financial buzzword; it’s a practical approach to securing your future and avoiding the so-called ‘retirement cliff’—the sudden loss of purpose and structure that can follow a business sale. Reinvestment ideas might include exploring new sectors, supporting startups, or even considering listed opportunities on platforms like the Australian Securities Exchange (ASX) or the London Stock Exchange. For tailored exit advice, Business.gov.au offers valuable resources to help you navigate this transition.

Consider the story of one Australian owner who chose a management buyout as their exit strategy. After the sale, they took a six-month sabbatical, using the time to travel and reflect. But the story didn’t end there. The owner returned to the business, not as a leader, but as an advisor—helping guide the next generation while enjoying a renewed sense of purpose and a flexible lifestyle. This approach allowed them to preserve their personal legacy and stay connected to the company’s future, all while benefiting from wealth diversification and reduced day-to-day stress. For more on management buyouts and exit strategies, FBRC provides expert guidance.

Market conditions can change quickly. A strategic hold, with a new set of criteria, can be just as powerful as a sale. Owners who keep a stake in their business or reinvest in new ventures remain agile, ready to seize opportunities for re-entry, merger, or trade sale if the market shifts again. Monitoring the market through platforms like the ASX or London Stock Exchange can help you spot these openings and make informed decisions about your next move.

As Richard Branson famously said,

'Retirement is a misnomer for those who love what they built; the next adventure often starts the day after closing.'

Exit is not the end—it’s a new beginning. Whether you sell, hold, or redefine your involvement, the key is to approach post-sale life with intention. Focus on reinvestment, personal legacy, and your evolving role in the business community. For more insights on planning your next chapter, sign up for updates at Evaheld and take the first step toward a purposeful post-sale life.

Future-Proof Your Legacy: Stories, Wishes, and Documents in One Secure Vault

Your life is a rich tapestry of stories, relationships, and intentions. The Evaheld Legacy Vault is the dedicated platform to protect it all, giving your family the priceless gift of clarity, connection, and peace of mind for generations to come.

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Transform your memories into a timeless family archive that future generations can truly experience. Within the Evaheld Legacy Vault, you can record videos, capture photos, write reflections, and create Legacy Letters — weaving together the laughter, lessons, and love that define your family’s identity.

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Evaheld is more than a digital vault; it's your family's private collaboration platform for intergenerational storytelling. It’s the simplest way to ensure every voice is heard, every memory is captured, and every bond is strengthened—today and for the future.

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When to Sell, When to Hold: Writing Down Criteria