More than a third of the business owners are 55 or older. For many of them it is time to prepare for sell.
One of the main objectives of the preparation process is to identify the key aspects that need to be improved and reduce any possible risks that a potential buyer might perceive to be a problem.
There are many businessmen who, at 55, decide they have enough money and “have done it all”, they no longer feel the urge to continue fighting and would rather focus on other pastimes, such as travel.
They may feel a social responsibility to dedicate the rest of your years to an NGO, maybe you want to buy a company focused on another activity, perhaps you want to devote yourself to politics or to your family (to enjoy spending time with your grandchildren in a way you couldn’t with your children because it coincided with the initial stages of your company). Having founded or inherited a company doesn’t mean you have to spend your whole life dedicated to it.
Others prefer not to retire until 70. In a highly competitive business world like today’s, without complete dedication from its owner, a company can rapidly deteriorate: the necessary amount is no longer invested, it loses competitive strength, and talented employees notice a lack of drive within the company and look for new work. It creates a vicious cycle that ends with the life, closure or bad sale of what were once magnificent organizations.
This situation is very common; the employer does not want anyone to know that he is willing to sell, which means he cannot completely explore the possibilities. It is also common that a business owner sees his competitors as the best candidates, but the idea of them knowing that he is selling makes him dizzy. He doesn’t know the techniques that exist in order to correctly manage confidentiality and he doesn’t know where to find other buyers.
As he doesn’t see a solution, the businessman gradually lets time pass by and it becomes increasingly difficult to sell.
If a businessman is 63 and wants to sell his company and retire in two years, it is always a good idea to start preparing the company for sale.
Any businessman thinking of selling his company should start preparing one or two years in advance
When you want to sell a house, you make improvements such as painting it, mowing the lawn, cleaning it and fixing anything that’s broken. These small touches can increase the value of the house in the eyes of the buyer because it changes its overall aspect. With a value much higher than a house, this advice rings even more true when it comes to your company.
If our client has time, we always begin to prepare his company one or two years in advance. This way, we have more time to improve its value, make it more attractive, interest more buyers, increase our chances of success, remove obstacles, and minimize the fiscal impact and economic consequences of the sale.
Don’t forget that by failing to prepare, you are preparing to fail.
Written by Enrique Quemada, president of ONEtoONE Corporate Finance.