Trusted Advice On Preparing A Business For Sale
Maven Tips - Selling A Business
Maven Tips are tips and advice that business owners should know about the process of merging or selling a business. Be sure to check back monthly for updates. The most recent MergerTips are listed at the top. To receive Maven Tips in periodic emails (click here).
Resolve Partner Issues
Resolve all shareholder/partner disputes prior to selling a business. Waiting until the sale process could kill the deal and give your partner leverage against you.
Be Wary Of Valuation Stories
In today's merger and acquisition market be wary of stories about high business sale multiples. These often include unachievable earnouts resulting in a lower actual valuation multiple.
Why Some Owners Never Sell
Some owners never sell because their identity is tied to their business. It’s never too early to ponder your post sale plans. Going through a formal exit planning process at least three years before selling can help an owner crystalize his/her post business sale life.
Hire A Strong CFO
Hire a strong CFO at least a couple of years before exiting your business. Not doing so could negatively impact your business' valuation. A strong CFO is an asset to the deal team representing the seller.
Beware Of Deal Fatigue
Business owners, a drawn-out process is not your friend when selling your. The reason is deal fatigue reduces the likelihood of closing the deal. Make sure you engage advisors who are experienced in mergers & acquisitions to increase the liklihood of the deal closing.
Predictability Is Important
In today’s merger and acquisition market, the predictability (certainty) of the selling company's cash flow has a strong impact on a business’ valuation.
Use A Controlled Auction Deal Process
When selling your business, use a controlled auction to let the competitive forces of the market enhance your business' valuation and deal terms.
Acquisitions and Risk Management
Companies should be continually examining their supply chain for possible acquisitions to manage risk.
Don't Roll The Dice
At their risk, most owners roll the dice hoping to be opportunistic when selling a business instead of sticking to an exit plan.
Don't Miss Your Perfect Sale Opportunity
Most businesses growing via acquisition migrate to buy larger companies. Sellers this may eliminate your ideal buyer.
Know Your Weaknesses & Risks
Want a high return on investment? Hire a merger & acquisition advisor to identify your business’ weaknesses/risks as a business buyer would see them.
Two Critical Ingredients For A Successful Sale
Trust and chemistry between a seller and buyer are essential to completing a business sale.
It Is Not Always About The Highest Price
The highest price is not always the most important criteria to a seller. While a seller should not say that to the buyer, it is important that the seller or seller’s representative convey what other considerations are important so the buyer can consider them as part of the proposal. An example would be the seller wanting to have certain key employees receive employment contracts.
Go With The Sure Thing
It doesn’t make sense to accept a slightly higher offer from a buyer that may have questionable financial resources. Instead, accept the lower offer from a well-financed buyer.
Anticipate Deal Hurdles
Smart sellers hire advisors experienced in merger and acquisition transactions far in advance of commencing the business sale process. Doing so will enable the advisors to help dress-up the business for sale and to proactively anticipate the various due diligence requirements a buyer will request.
MergerMaven's Mantra
Resolve Partner Issues
Resolve all shareholder/partner disputes prior to selling a business. Waiting until the sale process could kill the deal and give your partner leverage against you.
Be Wary Of Valuation Stories
In today's merger and acquisition market be wary of stories about high business sale multiples. These often include unachievable earnouts resulting in a lower actual valuation multiple.
Why Some Owners Never Sell
Some owners never sell because their identity is tied to their business. It’s never too early to ponder your post sale plans. Going through a formal exit planning process at least three years before selling can help an owner crystalize his/her post business sale life.
Hire A Strong CFO
Hire a strong CFO at least a couple of years before exiting your business. Not doing so could negatively impact your business' valuation. A strong CFO is an asset to the deal team representing the seller.
Beware Of Deal Fatigue
Business owners, a drawn-out process is not your friend when selling your. The reason is deal fatigue reduces the likelihood of closing the deal. Make sure you engage advisors who are experienced in mergers & acquisitions to increase the liklihood of the deal closing.
Predictability Is Important
In today’s merger and acquisition market, the predictability (certainty) of the selling company's cash flow has a strong impact on a business’ valuation.
Use A Controlled Auction Deal Process
When selling your business, use a controlled auction to let the competitive forces of the market enhance your business' valuation and deal terms.
Acquisitions and Risk Management
Companies should be continually examining their supply chain for possible acquisitions to manage risk.
Don't Roll The Dice
At their risk, most owners roll the dice hoping to be opportunistic when selling a business instead of sticking to an exit plan.
Don't Miss Your Perfect Sale Opportunity
Most businesses growing via acquisition migrate to buy larger companies. Sellers this may eliminate your ideal buyer.
Know Your Weaknesses & Risks
Want a high return on investment? Hire a merger & acquisition advisor to identify your business’ weaknesses/risks as a business buyer would see them.
Two Critical Ingredients For A Successful Sale
Trust and chemistry between a seller and buyer are essential to completing a business sale.
It Is Not Always About The Highest Price
The highest price is not always the most important criteria to a seller. While a seller should not say that to the buyer, it is important that the seller or seller’s representative convey what other considerations are important so the buyer can consider them as part of the proposal. An example would be the seller wanting to have certain key employees receive employment contracts.
Go With The Sure Thing
It doesn’t make sense to accept a slightly higher offer from a buyer that may have questionable financial resources. Instead, accept the lower offer from a well-financed buyer.
Anticipate Deal Hurdles
Smart sellers hire advisors experienced in merger and acquisition transactions far in advance of commencing the business sale process. Doing so will enable the advisors to help dress-up the business for sale and to proactively anticipate the various due diligence requirements a buyer will request.
MergerMaven's Mantra
Plan, Optimize, Sell, Live Your Dreams!
