Your decision to sell:
Making the decision to sell your company is a tough one. However, when you decide to do so, make sure it’s a priority in your life. A common mistake is when a seller starts the marketing process and it’s not a priority, they end up half-assing the process and it’s obvious to buyers. Unlike a residential real estate transaction, there are only a limited number of buyers for any business. If a buyer walks, many times they will not come back.
Information Gathering:
In my opinion, this is by far the most important aspect to increasing the probability of selling your company for the greatest amount and for the best terms. It is important to remember, if a buyer has cash and is in an acquisition mode, they will find a company to buy whether it is yours or not. Be prepared to present the buyer with all company information in a timely, organized and professional manner. The longer you take to present requested information, the more your company looks unorganized. Why does a buyer want to purchase an unorganized company? When there are problems on the surface there are usually a lot more underneath. Remember 90% of an iceberg is underwater.
You need to create a web site that contains 95% of the info buyers need and want to look at. The reasons for creating a password protected web site as opposed to creating a typical paper sales book are as follows:
1. Buyers can view the info online within minutes as opposed to having to wait until the info is mailed.
2. The info can be downloaded immediately and forwarded to other members of the buyer’s group without your involvement.
3. The web site is password protected.
4. You can update the info on the web site as needed and do not need to take the time or spend the money to update the paper copies that you have already sent out to prospective buyers. Constantly mailing documents around the country wastes considerable time and money for absolutely no reason. Sending information around the world in seconds and at no cost is the main benefit of the Internet.
5. Having an informative web site for prospects to look at gives a good signal to the buyers that your management team is organized and Internet friendly … many companies are not.
Your web site should contain everything except your customer list. Most of the time there is a “Buyer’s Group”, these people usually include a financial person, an engineer, maybe a sales manager and the investor. It is imperative to educate each one of these people about your company as soon as possible following the initial phone conversation. When the buyer’s group visits your company for the first time, they should already be as educated as possible about your company. The goal of the first visit should be to become familiar with the facilities, the sales, financial, operational, and administrative processes and the management team. The buyers have a lot to learn in a short period of time … don’t make it difficult for them. If a buyer wants to look at certain information, get it to them in an organized fashion and get it to them quickly!
Finding buyers and working towards closing:
Actively finding, qualifying, and communicating with buyers is a full time job. If you are running your company, you need to continue to do so and hire an experienced merger and acquisition professional to sell or merge the company. Just like any task in life, the more you do it, the better you get. I have been involved in over 60 merger and acquisition transactions over the last 7 years and have seen people “on the other side of the table” make the same mistakes over and over. Mistakes can cost hundreds of thousands of dollars. There is too much money at stake, and you don’t get a second chance.
