To maximize the value of your company when you’re ready to sell, you should create a market for it where there are a number of buyers competing against each other for your business. Now, it’s important to realize that you’ll be kissing a lot of frogs along the way. There is no easy way to find the “right” buyer in this marketplace. You’ll need to talk to a number of them, listen to them and explore their needs and proposals. Ultimately, you’ll find yourself weeding out the ones that don’t work for you so you can narrow it down to the right buyer.
Most likely, if you’ve marketed your company correctly, you will get significant interest from both strategic and financial buyers. But, while many will initially be interested in your company, when they explore further, they will drop out of the process. This is not a reflection on your company – it is part of the education process. Potential acquirers need to learn about your opportunity, and undoubtedly, some will not find your company to be a fit for them. You’ll also choose to eliminate some of the potential acquirers based on culture, fit and economics.
Fortunately, if you’ve hired an experienced M&A advisor, he’ll be shielding you from the bulk of these initial conversations. One of the benefits of your advisor putting your marketing package together is that he’ll have learned many of the key parts of your business. Since he’ll know what sort of questions buyers will have when he is preparing the marketing package, he’ll most likely be able to answer the vast majority of buyers’ first line of questions.
So, rely on him to make a market and create the competition you need to maximize your company’s value. And don’t be shy about kissing frogs. One of them will undoubtedly be a prince.
Michael Schwerdtfeger’s eBook “The Inner Workings of a Deal: Tips for a Successful Transaction” is now available for download on his website. Get your free copy here: http://mbsmergers.com/downloads/Share: