From “When Should I Sell My Company?” to “How Do I Get Ready to Sell?”
Recently I was invited to join a Dealmaker’s Conference panel discussion with a team from Charlotte’s Womble Bond Dickinson, LLP legal advisors about Sell-Side Mergers & Acquisitions. Our session turned up numerous questions from the 250+ attendees about investment banking, in general, but more specifically about selling and valuing businesses.
Here’s the topline questions and answers that interested attendees most. I thought you might be interested as well.
When should I start preparing to sell my company?
There’s no better time like right now, whether you’ve just started your company or you’ve successfully operated it for years. Preparing to sell your company means making your company saleable. You should always be focused on revenue generation, profitability, growth and diversity in your customer base. Digging deeper, that means keeping your company’s financial statements meticulous and free of errors.
What do you wish your clients would do before they come to you to sell their company?
I’d like to see our clients have audited financial statements. In this volatile environment it’s a good idea to have your financial statements audited every year.
I’d like them to have had a conversation with every prospective buyer who has contacted them and collected those buyers’ names and phone numbers rather than deflecting them. Keep the lines of communication open. All it costs is a little bit of time; prospective sellers learn so much by listening to their potential buyers.
I also wish that all business owners would assemble their advisory group early, so that they can help the prospective seller stay on track to make, and keep, the company saleable. Advisory groups should include their business/M&A attorney, investment banker, accountants (both tax and audit) and their wealth manager. The business owner should meet with these advisors two-to-four times a year to keep the process active and on track. It takes time but sellers will be ready to sell if they practice this discipline.
How do you help your clients prepare to sell their company?
We provide Exit Planning Services which are based on our decades of experience in buying and selling large and small companies. We also have a due diligence checklist which we provide to our clients to help them have something to work from if they want to start this discipline on their own.
Is M&A slowing down?
Not for us – in fact our M&A activity has picked up. We are selling a company now that benefits from the tailwinds of a recession – our client helps its customers save money, which their customers care about in a period of economic contraction or even diminishing growth. M&A was crazy busy these past two-to-three years. Now, our prospective sellers can get attention from prospective buyers that they couldn’t get when the M&A market was overheated.
We’re Glad to Answer Your Questions – Just Email or Call
If you call, I am happy to have a conversation and to start a relationship with you. If you email, I will do my best to reply within 24 hours. Even if you never hire Tobin & Company, I can help get you on the right path. In the long run that helps us both.