It’s Never Too Early
You’ve heard the expression “It’s never too late”? In my business it’s never too early. I know you don’t want to sell your business now. “Things will turn around.” “I’m still young.” “I’m feeling fine.” “It can’t be this bad for too much longer.” “Why shall I sell now? I’ll only get 6X earnings. I might as well work for 6 more years, get the same money and then sell it.” “I’m having too much fun.” “Why should I sell? I’ll have nothing to do.”
These are all wonderful reasons and some of them might even be true. But what I know is true is that now is the time to be sure you are prepared to sell. Have a realistic view about what your business is worth. Know now what questions are going to be asked of you later and start preparing yourself to answer them. Understand your financial statements – what they say and what they mean. So many business owners pay more attention to the figures they keep for themselves in their upper right hand drawer than they do to their accountant-prepared financials and then are unable to discuss these financials with buyers. Buyers will eventually find out about the upper right hand drawer but they’ll never get there if they can’t get past the financial statements.
How are businesses sold? Your golfing buddy might say he wants to buy your business for his son-in-law but in actual practice, that’s not typically the way things happen. Selling is an arduous process with many pitfalls and risks along the way. Understand them now! Don’t wait until you have to sell your company and then go into it blind. A competent, organized, informed and well-educated seller adds value to his business. Nobody knows how to run a business better than successful owners but those owners have usually never sold (or bought) a business before. Be one of the smart owners who admit that and call me for an introductory, courtesy meeting to see if I can add value.
The decision to sell might come sooner than you originally thought. We are seeing a “perfect storm” develop of low interest rates, plentiful cash on the balance sheets of private equity groups and strategic buyers and renewed confidence about the economy. All of these factors spell higher valuations for sellers.
I have been in the merger and acquisition business for over 30 years. I have helped people sell and helped people buy companies. Now, for a reasonable hourly fee, I am helping them to be as smart selling their companies as they have been running their companies. I am not there to actually sell your business. I am there to help you prepare for the day when you decide to do it. It’s never too early!