After people read our bios, we typically get asked how the sale of our company actually went. And while we love to tell the story and enjoy reminiscing about the process, we often answer that question with another question: “What makes you ask?” What we want to know is if the person asking is capable of hearing and then implementing what needs to be done. Here’s why:
After these past few years of working with small business owners, we have learned that our most successful clients are our boldest clients. Preparing your business for it’s eventual sale requires bold and worthwhile change. It’s neither convenient nor easy. Unfortunately, it’s a decision few small business owners are willing to make. But for the ones who are willing, what an exciting process that begins!
A successful merger and acquisition involves a strategic formula that business owners should become familiar with years ahead of their retirement date. This allows an owner to properly prepare their organization to become an attractive acquisition for potential buyers. Here are some things to keep in mind when you are preparing your business to sell it:
- Determine a target date to sell
- Develop a plan to transform the company into a systemized entity that can run without the owner
- Decide whether the owner will maintain an everyday presence or become absentee
- Change team behaviors and expectations
- Keep the team accountable to the plan
- Seek outside help from a business advisor that has been through successful mergers
Another important consideration is to acknowledge a common misconception about exit strategies. Many business owners believe that companies looking to expand or purchase competitors through the merger and acquisition process are looking for low-cost bargains. This couldn’t be further from the truth! Great companies (often those successful competitors that small business owners emulate) always have an acquisition budget. Within that budget they desire to expand their company by acquiring solid, systemized competitors for a fair price.
That price is largely determined by how well an owner has prepared for his/her exit. The decisions you make today will determine your company’s worth tomorrow. And the preparation for the sale of your company is extremely worthwhile, but never easy. As you begin thinking about eventually selling your business, it is important to make decisions, as the author Michael Gerber states, “with the end in mind.”