Maybe not when you think. The business owner(s) is usually never completely ready to sell. In other words, there is no "perfect" deal. How does the owner best prepare for a satisfactory exit?
Steps to reach an exceptional finish:
- Discuss with your significant other what you are embarking upon and the timeframe. Keep them in the loop as the process progresses.
- Find and enlist a lead advisor, your quarterback. He/she should be your most trusted advisor, one who has only your best interest in mind. In some cases, that person may be a close friend or business person who recently sold his business. Alternatively, the advisor could be your legal counsel, investment banker, or accountant.
- Estimate your initial budget for the due diligence to prepare your company for sale. Whatever that estimate, reserve cash for twice that amount.
- Determine who from your firm you will include in the process. Also, set the boundaries for what information to share with them, and when.
- Delegate to your management team a detailed PERT chart of tasks and completion dates. Keep this due diligence program updated continually.
- With the assistance of your investment banker or valuation firm, or both, estimate the range of reasonable selling price. As part of this analysis, determine the lowest price you will accept, or "the line in the sand."
- Ensure that your focus remains on the business – revenues and EBITDA. Buyers get discouraged when they are in the process of due diligence and sellers are not growing, lose customers, or experience abnormal costs.
- Remain open to bumps in the road – there are numerous hurdles in the sale process, as well as unexpected delays. Keep a calm, open demeanor at times when the deal may appear to be unraveling. This occurrence may happen often, and is common to almost every deal that ultimately closes.
- Hire the best professionals you can afford, and ensure they will collaborate to your benefit. It is far better to pay more for the right talent than to skimp on fees and miss an advantage in the deal negotiations.
- Continue to reassess the management team you will leave behind when the transaction is completed. The more competent this group, the smoother the transition and more valuable the deal terms.