By Bob Hodgson, Investment Banker
You may be considering selling your Branson business now or sometime in the future. The most important thing you can do to ensure a successful and profitable sale is to take steps to properly position your business for the sale.
There are hundreds of reasons why a company is difficult or even impossible to sell. The main cause is a total lack of planning.
The process of preparing a business for sale is called “pre-sale positioning” because that is exactly what you are doing. You are positioning the company, its personnel, you and your family for the eventual sale.
All too often, owners want to sell their business “yesterday”. However, they have done nothing to position themselves or the company for the sale.
A recent company failed to sell because there was less than one year left on the lease. The building’s owner would not renew or enter into another lease because he had other plans in mind. The prospective buyer would have incurred several hundred thousand dollars to move the operation which made the sale unattractive.
Another recent example is an owner who made every decision himself. He did not want to remain with the company even one day after the sale. A new owner would be lost for months without assistance from a key employee or secondary manager.
Pre-sale planning: The goal of pre-sale positioning is to deal with any negative aspects that might hinder or prevent a sale. It also enables the owner to show the business in its best light. A negative situation for one company may be a positive situation for another.
If you are the owner and/or founder and have worked in the business every day, the decision to sell becomes very emotional. What are your goals? Why do you want to sell? For some, this may be easy, while for others it may reflect such things as family pressure or business problems. What do you plan to do after the sale? Would you like to retire, travel, buy another business or remain after the sale?
In next week’s article we will describe the major issues an owner must undertake when positioning a business for sale.
Amvest Financial Group is a leading international investment banking firm based in Kansas City representing clients with sales from $10 million to over $6 billion. www.amvest.com