When It’s Time to Cash Out – What’s Next? / by Kerri
It’s good advice to appoint key advisors in the sale process as soon as possible to reduce costs and get ahead of the sale. However, it is also imperative for you, the business owner, to do your part long before you bring transaction experts to the table.
Develop and discuss with all your advisors, a recap of what business you are in and your reasons for selling. It is your business and you know it better than anyone else. It’s up to you to communicate your goals for the business, your team and your objectives getting out.
a. Initiate due diligence proactively. It shows potential buyers you’re serious and committed to the sale. It also will identify area, concerns, risks that can reduce your potential sale price. For example, unpaid taxes, incomplete financials, employee contract terms.
b. Define your ultimate exit strategy, which can also uncover potential opportunities to increase or decrease the value of undocumented and unregistered intellectual property.
The bottom line is that your business needs to be prepared for the sale or other exit options at all times, which involves organizing all aspects of the business to be appealing to a buyer.
You must put yourself in your potential buyer’s shoes to take a critical look at your own business. If not, you risk not achieving your best outcome, leaving money on the table.
Taking time to understand the drivers inherent in a potential buyer’s business can help you position your business to be buyer attractive and achieve a better sale outcome.