I spend lots of time talking to owners of private companies like you who aren’t sure how they’re going to leave their business. You might think that you want to sell your company to an outsider….someone who can pay you lots of cash. You also might find that after a conversation with someone like me you realize your business isn’t going to get you the cash you thought.
I’m often asked what a business is worth. I’ve gotten pretty good at giving you an estimate about how a buyer might look at your business.
No, I’m not saying is your business going to be sold tomorrow. I’m assuming it’s not. I’m asking whether your business is sale ready. Sale ready is when your business could be sold but you’re not interested at this time.
A sale ready business is when you’ve become operationally irrelevant.
I spend a lot of time talking with business owners about the next generation in their business. If it happens to be a family business we always get into a conversation about which children should own stock.
Over the past few weeks I’ve had several spouses visit our site and download reports on selling a business. I don’t know the reasons why and can only guess it’s because the spouses of business owners are interested in knowing how the business actually fits into their financial security.
Learn about your spouses business.
I’ve heard it all. I want to make sure the buyer takes care of my employees, my customers, my suppliers, and my community. I agree you should care about that. Then you should ask yourself this question, “When someone buys my business why should they care about what I want?”
Know why you’re selling your business.
It might not be 20% of your time, but it will be at least that much if you want to have a continual source of revenue. One of the big problems you have when you run a small business is that there are dry spells of not having enough new business to service.
I was recently speaking with an investment banker who told me that the vast majority of his deals are going to private equity groups and not being sold as strategic sales. I’m not sure if this means larger companies have stopped doing strategic purchases or if selling to a private equity group is just an easier road.
Even if larger companies aren’t buying smaller ones in a strategic market place you might want to position your company for this type of transaction.