Who to sell your company to?
The time may come when you decide on changing projects or retiring, without a succession plan. You must prepare yourself and your company for one of the most important events of its existence: selling it to a third party.
During the sale of your company you´re risking the materialization of all the value generated through many years of hard work. Considerable wealth can be created or destroyed in this precious time. That´s why you must know all the techniques that help to maximize the sale price.
Many business executives wait for a buyer to appear someday, without stopping to think about the poor logic in selling the company to whoever comes first.
Is this the best buyer?
Is this who can pay the most?
It would be a huge coincidence if it was. It´s much more likely that it´s not. Also, by being the only buyers, they have substantial leverage.
Another mistake you can make is to allow a lawyer or a CPA to handle the sale of your company. Almost 70% of a deals value resides in finding buyers with the best strategic fit, who can pay more for your company. A lawyer or a CPA may find a buyer, but it´s unlikely that they´ll locate the best possible buyer since they´re not specialists at locating ideal buyers.
If you really want to maximize the sale value of your company, you, or the advisors you hire, must perform a rigorous search process to find the best buyers or investors: those who have better synergies with your company, who are stronger financially and who recognize the strategic value of your company (wherever they may be). Then you´ll have to make them compete to increase the price.
The key factor in maximizing your company´s price is getting the interest of powerful buyers, with great economic resources and strategic motivation to acquire your company.
The keys to price and how to put the finishing touches on a value and wealth creation process, for those who have taken the risk of entering the entrepreneurial world. It´s one of the most important and delicate moments in the life of a company and, hence, where there´s the greatest need to act the most professionally.
This article was written by Enrique Quemada, Chairman of ONEtoONE Corporate Finance Group