I recently came across an article published on Axial that was guest written by a fellow who had sold three companies that he owned over the past few years.
I always love these “inside the deal” looks because there really is only one way to experience an M&A transaction: Go through it!
Unfortunately far too many, like Giff Constable, learn how to sell a company while making a boatload of mistakes. To aid other entrepreneurs, Mr. Constable penned an exceptional piece narrowing the plethora of mistakes most “going solo” business sellers make down to four major ones:
Constable calls these “CEO self-deceptions,” and they are far too easy to fall into and have dangerous impacts on selling a business.
Of these, the last two go hand-in-hand. Taking the last one: You can wait to talk to buyers “when the time is right.” BUT how do you know the time is right?
Keep this in mind:
There are two kinds of sellers – those that HAVE to sell and those that PLAN to sell
Too many business owners only know that it is time to sell when one of the big Ds force them to talk to buyers:
We hear horror stories about these every week at our exit planning conferences. Sadly, by the time an owner is in the midst of one of these, it is a fire sale and any buyer will do. So, it is far better to PLAN to sell your business than wait until negative circumstances force your hand. The key to this is:
Get started early!
It is never too early to avoid the third mistake above by hiring a professional M&A advisory firm.
The reality is that the professional process to selling a business, which gives you the best chance of achieving maximum value when you exit, can take 9-14 months to complete. That’s because it is comprised of several key steps:
And while these are going on, YOU NEED TO KEEP FOCUSING ON RUNNING YOUR COMPANY.
I bolded and capped the last sentence because it really is why you need to hire an M&A firm to guide you through selling your company. If you take your eye off the proverbial ball, you could literally lose millions of dollars off the offer you receive by missing your projected numbers.
So as much as you can, avoid all four of these mistakes:
Special thanks to Axial and Giff Constable for doing such a great job outlining these.
We expand on these and many more mistakes when selling a business in greater detail at our complimentary exit planning conferences. It is just one of the many topics we examine in detail during this comprehensive education on how and when to exit for maximum value.
Interested in learning more? Follow these links:
By Carl Doerksen, Director of Corporate Development at Generational Equity.
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