Owners of small-to-medium sized firms thinking about selling are often privately worried that their business won’t attract what they believe it is really worth. Maybe the market for your business is currently out of favor? Or you’re just coming off a weak sales period? Perhaps you’re simply unsure how to prepare because this is all new to you?
You’re not alone. In fact, if this is the first—or possibly the only—time you’re going to sell your company, figuring out when to go to market and what should be done to get it market-ready can be daunting. Getting this right is critical to ensure your business sells for the maximum value.
Owners often wonder if it could be financially advantageous to wait a year or two before they hit the market…. but time doesn’t fix everything and often it’s not on your side. Once an owner decides they want to sell in the next 1-3 years, they need to get to work on making sure the business is market-ready too!
There are ways to get your “not market-ready now” business ready for sale in a shorter time and a more assured way than you may have thought possible. It requires creative thinking, experience, and expertise to perform what we call a “sale ready analysis and execution plan.” An experienced outside advisor can often see what the CEO/business owner may be too close to appreciate, while also providing guidance on issues that could impact the eventual sale. In fact, identifying and making the right fixes can make all the difference to achieving a successful exit.
Over the next few weeks, I will share several specific real-life examples on how a little bit of prep and analysis went a long way to properly positioning each business for sale, resulting in highly desired outcomes. Although each of the cases are quite different, all achieved their company sale transaction goal using the same methodology adapted to each company’s specific circumstances. Cases that we will cover include:
- The investors in a records management software-as-a-service company that was experiencing flat revenues wanted to sell the company and get their money out within 12 – 18 months. They were looking for outside expertise to help the company’s management team get the business on a better and more defensible growth trajectory to attract acquirers and increase the likelihood that a sale would happen at the best possible sale price.
- The owners of an established, family-owned document and records management services business decided it was time to sell, something they had never done before. A challenge they faced was that two different businesses with different technology stacks and markets had evolved under their “one roof” and operating infrastructure. They aspired to get as much for the family from the sale of the business and sought expertise to help them determine the best exit strategy and necessary steps to prepare the business for a sale.
- Two equal co-owners of a subscription service software company serving process industries wanted to sell their company and retire. After unsuccessfully trying to sell it on their own, they realized their company was not market-ready for a sale and that they needed expertise to prepare for the sale process.
Thinking of selling?
Just as a homeowner looking to put their house on the market should “shine up” the property to achieve the highest sales price, CEOs/owners of companies looking to sell would be well served to seek an advisor who specializes in the preparation of an exit. A good advisor can help assess improvement opportunities for the company, identify key changes that will have the highest impact on sale likelihood and valuation, and lead the company through an efficient process to create those changes. The key is bringing together key decision makers with the expertise that can help them pursue the most impactful actions that achieve a singular objective – a successful transaction at maximum value.
For more information or to inquire about a specific topic, please contact FOCUS Managing Director Jeb Connor at [email protected].