Early in my career, I worked for a very wise entrepreneur. I helped him expand his manufacturing company overseas. I was also involved in the process when he sold his business to a large industrial group. This was many years ago. I learned a lot from him.
A piece of advice he gave me was very instrumental in my current role as an M&A advisor.
When I asked him how he was able to manage the process of selling his business so well, he told me the following:
- Always be prepared (“Keep all the records and books up to date and be prepared as if you will sell your business in a couple of months”)
- Communicate your reason for the sale very clearly (“Our industry and our customers need global suppliers. As a local supplier, we will need to merge with a bigger supplier to secure our future and become a regional or global company. Otherwise, we will not survive in a few years”)
- Have good advisors (“Since the early years of the company, I was able to have a network of a few good advisors, particularly a bright lawyer. I could not afford him in the beginning but he stayed with me in the long run and we were able to pay him after the first year. This trust-based relationship helped me get strong support at very critical stages of building the company. He was also very instrumental in the sale process”)
- Keep your distance from the negotiations table (“As the founder of the company, I have to keep my emotions away from the negotiations table. Therefore, I only give my negotiations team the target price for the sale and trust them in the process.”)
- Keep your focus on the business (“The sale process may not go as planned. Make sure that you keep running your business as if the sale process would not go through”)
- Plan well and know what you will do after you sell your company. (“I know that I will be out of the company when the sale process is completed. I already have a few projects that I lined up which will keep me busy. Also, I prepared a family trust that will secure the educational funding of the future generations of my family. “)
So, what else do you need to consider before putting your business on the market?
I also attached below an article on this topic that I thought would provide further ideas and insights…
https://www.thegazette.co.uk/all-notices/content/101233
“It can take many months to plan a business sale effectively, but it is advisable to consider an exit strategy as far ahead as possible – even several years. This helps you to define who the ideal buyer would be, and take practical steps to make your business as attractive as possible to potential purchasers.
One of the fundamental aspects of your business sale is being clear about the reason why you are selling. If you can’t clearly articulate this, you may arouse suspicion in prospective buyers that there is something to hide.”