Bill Quish has over 530 business owners and professionals following his advice (Tweets) on Twitter regarding all aspects of selling a business. The following is a first in a series of articles that highlight some of his advice for business owners.
My reality check rule when selling a business is to “see things from the other party’s perspective.” This approach will keep you grounded and increase your chances of achieving a successful transaction.
Regardless of how good the merger & acquisition climate is today, it can turn sour on a dime.
Negotiating with one buyer won’t maximize your business’ sale price and increases the odds the discussion will go nowhere.
Exit/succession planning positions you to transfer ownership on terms that meet your personal, business, and financial goals.
Have an experienced merger & acquisition lawyer perform a legal due diligence review at least 12 months before starting the business sale process. This will provide time to fix potential deal killing issues.
Selling your business to a 3rd party typically increases the money you will receive and reduces your post sale financial risk (i.e., collecting your money).
Surround yourself with advisors who aren’t afraid to speak the brutal truth to the hand that feeds them.
Don’t sell your business without first understanding key transaction terminology.
Every $100,000 increase in a mid-size business’ profitability should increase its valuation by $300,000 to $600,000.
If “you are the business,” your business will be hard to sell and if it does, will not command a premium price.
How are you going to realistically monetize your company’s value? Exit planning examines the pros and cons of all the alternatives.
Will ownership transfer to your children achieve your personal and financial goals? If not, can you afford to take this risk?
According to a PricewaterhouseCoopers Study, the failure to do pre-sale planning is the number one reason why business sale transactions fail.
When selling a business, achieving an optimal deal structure greatly depends on the skills and experience of your merger & acquisition advisor.
Business buyers consider growth, profitability, risk and synergies when determining how much to pay for a company.
At their risk, most owners roll the dice hoping to be opportunistic when selling a business instead of following an exit plan.