What’s Your Competitive Advantage on the Market?
Consider why prospective buyers would be interested in purchasing your company. You should be able to identify its assets in order to get a proper business valuation. How unique is your product or service offering? Do you outperform the competitors in your sector or in a particular geographic area? You will also want to consider whether your revenues are stable, growing, or declining. If you understand why someone would be interested in purchasing your company, you will be more equipped to enhance those qualities and effectively articulate them to buyers.
Who Are Your Potential Buyers?
There are several different types of buyers out there, including strategic investors, private equity, competitors looking to expand, individual buyers, and even your existing employees. Think about what type of buyer makes sense for your business and what type of buyer might be best for your company’s future.
How Will the Sales Process Affect Your Business?
Selling a company will certainly shake things up for its day-to-day operations. These impacts can be significant and are important to consider before a sale. Think about how it will affect your employees and if you believe they will stay with the company after a sale. Will your customers also stick with you? You need to control the messaging around a sale from day one to avoid rumors and panic among staff, vendors, customers, and anyone else who can be impacted. The last thing you need is key people to be jumping ship when you are trying to drive up the value of the business.
Are There Obstacles to a Sale?
Be realistic in assessing your business’s shortcomings. If you identify problems, figure out if and how they can be fixed. Weakness can include declining sales, diminishing relevance, lack of growth potential, poor financial recordkeeping, too much debt, or labor contract issues, just to name a few. Addressing any issues as early as possible will greatly impact your company’s value in a sale. NOT addressing them will also impact its value but in a negative way.
What Will You Do Next?
You’ve likely been dedicating most of your time to the business you have built. It’s a huge part of your life, and you should think about what it would be like if you no longer have it to tend to each day. Some business owners are perfectly content to retire and walk away. But others have trouble letting go because they are afraid that they won’t know what to do with themselves. Picture what your life looks like after your exit, or more importantly, what you WANT it to look like. If you think full retirement may not be exciting enough for you, consider what other ventures you could invest in that will not consume all your time but give you an outlet for your energy and passion. This is a time in your life that you need to be adequately prepared for mentally, not just financially.
Can You Replace Your Income?
As a business owner, you likely enjoy a nice salary, benefits, bonuses, and paid expenses. When the time comes for you to exit your company, consider how you will survive comfortably without that salary AND all those other perks that do add up. It would help if you understood all of the financial benefits you get each year as an owner and how your life will need to adapt when those benefits are no longer available to you. This is also why you will want to sell your company for the maximum amount possible, getting you every penny that you deserve.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Enquiries@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL
Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $8.25B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 14 offices across the world, have assisted thousands of owners with achieving their personal objectives and ensuring the continued growth of their businesses.