You, the business owner, are a risk taker that is accustomed to getting things done onRead Further
It’s easy to focus on your own needs in anticipation of a sale, but the market has a perspective, too. Consider how the market governs potential sale price, and don’t structure your deal plans entirely around your own needs. Otherwise you may never reach a sales agreement.
Sale price matters, yes, but it’s not the only factor. Taxes, fees, and the ultimate future of your business are also key factors. Moreover, there are other ways to extract a profit from a deal, so demanding a high upfront sale price is rarely the best or only strategy for a sale.
A business is nothing without excellent employees. In their haste to achieve a sale, many owners alienate their employees, or fail to take proactive measures to get them to stay on board. Firm up your contracts and make your key people feel valued. Otherwise your business could lose its most valuable asset: the staff who help to build it.
The other side is going to have a strong team of experts in their corner. Do you really want to begin the negotiation process at a disadvantage? Negotiating alone is a losing strategy that guarantees you’ll get less than you want—and less than you can. Work with a deal advisory who can help you navigate the negotiation process, or pay the price.
Just as you shouldn’t negotiate alone, you shouldn’t plan the deal alone. You’ll need an expert army of lawyers, advisers, and industry experts who can introduce you to the best buyers, ensure you’re ready for the deal, set your expectations, ensure a fair deal, and free your time to continue running your business.
Pre-sale due diligence isn’t free. Many owners balk at the cost and time required to get their books in order, produce a detailed inventory, and enact other strategies to ensure a smooth and lucrative deal. Without preparation for due diligence, though, you could invest time and money in a deal that fails. Due diligence is the make or break moment. Prepare for it at the outset or watch your deal crumble.
The time you’ve invested in your business confers it with intense emotional meaning. It can be hard to walk away. That’s why many sellers get cold feet as a deal gets close to closing. There are many ways to manage these emotions, but not involve walking away at the last moment.
Talk to your advisers, to your family, and to other people you trust about how you plan to spend your time after your business sells. What do you envision your life looking like? How does it need to look for the deal to be worth your effort? Focus on this outcome, and find ways to fill your time. Otherwise you may find yourself locked in seller’s remorse. Before a deal, this can kill the deal. And after, it can kill your joy.
Prior to purchasing IBEX, Chuck Harvey spent 35 years as CEO, CFO and consultant to the Fortune 500, Middle Market, Mainstreet and in the Start-up community, including spending time at PepsiCo & Price Waterhouse Coopers. During that time, Chuck oversaw three dozen buy-side / sell-side transactions on three continents, including a $35M sale of a Texas digital photography pioneer to a $1 Billion Japanese conglomerate.
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