So you’ve built your company, growing it with care. Now, you’re thinking about how to make it even more attractive and position it for a lucrative acquisition.
The No. 1 thing to know: It takes time.
A two- to three-year planning timeline can ensure your business is ready to fetch the best price possible. If you’re serious about selling, doing due diligence on your own brand is crucial –and that requires a bit of critical introspection.
Here’s what you need to do to prepare for potential suitors:
Get your house in order
Before anyone even knows you’re considering selling your company, get to work! Make sure your finances are transparent and your systems are up to date. Address and resolve anything a purchaser might view as a risk. Document all in-house policies and procedures so they can be easily handed over for a seamless transition. Invest in systems that enable you to highlight important KPIs and metrics. Hire top-tier lawyers and accountants to review your company so they can tell you where you need to do the heavy lifting before hitting the market.
Tackle any HR issues and have a strong, impressive staff and management team in place that will add immediate value to the sale. Be honest and forthcoming about any missteps the company has taken and consider how to frame that information for buyers, who are bound to unearth it while conducting their own analysis and due diligence. Imagine your company without you and make sure it can still run well if someone else had to step in to lead.
Line up your advisers
Pulling together the right roster of consultants early is important. Your trusted accountant, attorney and communications strategist can all be looking at the business through various lenses as you construct a plan. Each person brings key skills to the table and, together, these weave the strategy that will carry you to the finish line. Listen to their suggestions with an open mind and leverage their expertise to shore up areas where you don’t have a lot of experience and might not have considered.
Gather the data to tell your story
What was your initial vision for the company? How has it evolved? Are your employees and customers loyal? Have you celebrated achievements, anniversaries and milestones? What are your plans for the next two years, and how can you communicate those both internally and externally, so everyone is aligned with the target goals? Are your communications channels working well with employees, clients and other stakeholders? This is a good time to conduct a brand audit and make changes where necessary. Build out storylines for your business, refresh your marketing and energize your team with a solid go-forward strategy. Make sure industry analysts and reporters know you and your business well, and be strategic about making smart announcements that reinforce the health of your company.
Know your strengths and selling points
There are many ways to assign value to a company. You may be a lucrative prospect because your customer base is the envy of the industry. Your physical location and digital footprint may have buyers banging on your door. Recurring revenue and solid year-over-year increases might pique buyer interest. You need to maintain a respected brand, and it’s vital to possess the self-awareness to know which of your strengths and qualities will attract your target buyer.
Identify your best buyer
Selling your company doesn’t mean that you’re no longer invested in its success. So if the chemistry with a potential buyer isn’t right, you have to be willing to recognize that immediately. The last thing you want is to be courted by someone who doesn’t understand the company culture and vision or connect with its employees and customer base. After all, a company is built on people and partnerships. Take the time to think about what your business needs to keep growing, and what type of acquiring companies and personalities would be the best fit. Who are they? What will they be looking for? How will buying your company help them? Think concretely about who won’t be a good fit. This is an important exercise to work through with your external advisers so you’re all on the same page. Don’t waste time and energy going after the wrong buyer.
