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Private Company Capital Newsletter
SELLER’S COUNTDOWN If I am considering selling my business, or just want to keep the option available, what should I do now? As most successful entrepreneurs contemplate the future of their business, they come to the realization that they owe it to themselves and their business to explore the possibilities of a merger or sale. Maybe you just want to get a few chips off the table through a recapitalization. Or maybe you just want to become financially independent and do something different with your life. If you are like most business owners, selling your business will be one of the most monumental events of your life, both financially and personally. Done right, it can create great satisfaction and financial security from many years of effort. Done poorly, it can cause frustration, financial risks, and a disappointing return on your investment. What are the options? What does a seller need to know? How can you prepare? While these questions are too big to answer in this article, this section should provide you with a general guideline to put yourself a position to maximize your options. Selling Your Business? Then Plan Two Years in Advance. Selling your business is a once in a lifetime opportunity, that can bring a host of financial and emotional issues. Here is a suggested countdown plan. COUNTDOWN 24 months prior to the sale – Commence having your financial statements audited by a reputable and well-known independent accounting firm in order to insure credibility and respectability from your potential buyers. 18 Months Prior to the Sale – Establish a strong management team that can successfully run the business when you are absent and encourage customers and supplier to start dealing less and less with you. 12 Months Prior to the Sale – Broaden your business so you are not overly dependent on a few customers or a few suppliers as buyers become very concerned about “too many eggs in one basket.” 8 Months Prior to the Sale – Flush out all problem areas that may become apprehensive, i.e., unsettled law suits, EPA problems, outstanding warranties, uncooperative minority shareholders, unsettled lease arrangements, etc. 6-12 Months Prior to the Sale – Line up advisors to assist you such as a professional appraiser, experienced intermediary, transaction oriented lawyers and accountants, etc. Your intermediary will help you develop a plan to market your business effectively and identify logical buyers. Then – Choose the optimum time to sell your business when the trends are up or strategic buyers are in an acquisitive mode. [ Home | Our Firm | Services | Past Transactions | Research and Resources | Contact Us ] Brereton, Hanley and Company, Inc. Spear Tower One Market Plaza - Suite 3600 San Francisco, Ca. 94105-1120 Phone: (408) 938-9255 Fax: (408) 938-9259 |
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