Choose Your Personal M&A Team
Preparing your company for sale is not only one of the most important events of your company’s life; it may be one of the most important events of your personal financial life.
Since you have a full time job, bringing on board an expert to help guide you through the steps of the sale makes sense. Someone who has been in your shoes and through numerous sale processes can help maximize the value of your sale in dollars and in value to your employees, customers, suppliers, and shareholders.
Get Your Company In Shape
When preparing for a job interview or a sales call, you always make sure your attire is clean and appropriate and that you look presentable. The same applies to your business.
A look in the proverbial mirror for your business is key before fielding offers. The first step in doing so is a valuation to establish a realistic market value to your business. An investment banker can do this with your potential acquirers in mind, accounting for the intangible value your business creates.
If the look in the mirror does not yield the desired value, an investment banker can see through the eyes of your acquirer and help you improve efficiencies, or even increase profitability.
Get a Trusted Advisor
You only have one chance to sell your business, making execution critical. It is possible that your buyer has undergone multiple transactions and understands the complexities that lie on the road ahead. The right professional intermediary can help you navigate this road to reach a successful sale.
Along with understanding the value of your company, an experienced advisor can help you establish value around the non-financial details of your company. These include your employees’ roles, your roles, non-competes, earn-outs and more. Quite simply, a trusted advisor makes sure you are adequately compensated for the value you are adding to your acquirer.
Find the Right Buyer
Large, strategic acquirers know how to find a bargain. Acquirers will often try to bind sellers with an exclusivity agreement in an effort to keep them from negotiating with other potential acquirers. This keeps competition out of the picture,
An experienced intermediary creates an auction, giving the seller control when offers are submitted. Buyers must bid against one another for the seller’s consideration.
Additionally, the investment banker will help you identify which buyer is the best fit. A strategic buyer should be just that; a buyer with a goal that acquiring your company will help them attain. That could be entering a new geographical market, product market, or eliminating a competitor. A financial buyer’s goal is to maximize return on investment, whether they are acquiring your company as a platform company or adding your company to a portfolio company.
Time is the Enemy
While the buyer’s best interest lies in a swift close and integration to begin implementing its plan for your company, a seller has financial incentive to close speedily. The seller does not collect a check until the deal closes, but there is more at stake than the initial payment. If you have agreed to an earnout, the faster integration takes place, the more quickly you can begin achieving profitability.
Protect Your Stakeholders
Whether it’s your employees, your customers, your vendors, or shareholders, your stakeholders may play an important role in the future performance of the company and therefore, the financial outcome of your sale. You must understand the buyer’s plans in order to explain them to the stakeholders, so that they will continue to perform after the sale.
Mind the Details
Many small details will arise between the time that Letters of Intent are issued, and integration is consummated. The correct advisors who can contribute their time and experience will be important to you, so that your sale will be successful in all aspects.
From start to finish, an investment banker can make a world of difference when preparing to sell your business.