Selling up isn't easy; so what can I do to make it happen?
It isn’t unusual for owners of agencies to see the potential proceeds of a business sale as a significant element of their retirement fund.
However, it is surprisingly unusual to see an effective action plan designed to make it happen! In fact it is more unusual to see any formal business plan at all in small businesses, let alone for a potential sale process. In truth, too many businesses enter into a process without being ready and as a result, many don’t actually achieve a sale. So let’s think about mindset and preparation.
So what actions can you take to increase your chances of success if selling – in the short medium or long term - is on the agenda?
1. Plan for it
It is never too early or too late to start planning the sale of your business. There will be many emotional aspects to the decision and the process. If you are aware of them, and you need to be, you can anticipate the issues and prepare counter them, increasing your odds of success. And when you are going through the process of preparation, constantly remind yourself – this is all just business and it isn’t personal. People are going to take a close look at what you do and how you do it; they are going to be spending their money after all. If it was the other way around, then you would be as tough as they are!
2. Tackle the difficult business issues before you get to the process.
It is natural to want to emphasise the positive and seek to avoid some of the more challenging issues in the business. Natural, yes, but in the light of the inevitable due diligence, it is unlikely to be helpful. Whatever the issue, it is sure to come out, so the better strategy is to identify it, explain it, assess the impact with clarity and let the negotiation take its course. Getting the issues onto the table early will help maximise the overall value rather than diminish it; it allows the negotiation to happen as a managed part of the process and of course, instils confidence. Better to be on the front foot and telling the story as you see it with the plan and mitigation strategy in place, rather than be on the back foot, defending from a position of weakness.
3. Knowledge is power
You know your business inside out and much better than any potential buyer and it is likely that you intuitively know where the value lies. But do you really know the facts and are you able to articulate them with accuracy and insight to a third party? The fact is that the buyers are not you and, inevitably, no questions are dumb questions for them. So before you get into the dialogue, take a step back; think about your business as a third party would and understand what they need to ask you and your team to get under the skin. If you can identify the key questions and then answer them with facts, data and insight, you will instil confidence in everyone associated with the process, you and your team included.
4. Plan for life after sale
And finally, what comes next for you? And what about your loved ones and dependents? What do they think?
A sale is a life-changing event and it requires focus and acceptance of the changes that you will experience. Every journey should start with a clear destination in mind; if you have one you will avoid the fear of the unknown and enhance your chances of success. How will you describe yourself post-sale? Retired but “looking for fulfilment in different ways”? Moving to the “next challenge”? Consultant, coach or mentor? Taking time out before “doing it all over again”?
What and who do you want to be when the company is no longer yours? And who will be honest with you about your plans?
Ultimately, there are no guarantees when it comes to a sale; no guarantees on either maximising value nor on actually making it happen. However, planning will maximise your chances. It is all about preparation and mindset if you don’t want to leave it all to chance.