Use time as a friend to effectively think through these deal related questions
Private company owners are often stressed going through the process of selling their business but for too many, it’s more stressful than it needs to be. This is because many decisions they face through the exit process weren’t given the proper early thought and pre-planning that they should have gotten so certain key decisions become more rushed. Here are some examples of decisions you’ll be making when selling your business to a third party:
- Do you want the acquirer to continue using your company name or tradenames?
- Is there a family legacy aspect to the business that you want the acquirer to protect going forward?
- If you own your company facility/facilities, will you expect the acquirer to acquire or lease it/them for a minimum period of time?
- Will you accept an acquirer that elects to relocate your business?
- Will you have any requirements that an acquirer maintain all or some portion of your workforce?
- Are you looking for an all cash payout for your company or will you accept some portion of payout in an earnout structure (a portion of your proceeds received only upon achieving future company performance milestones) or accept a portion of the payout in the form of equity issued to you by the acquirer (i.e.: stock)?
These are just some examples of questions you’ll want to give yourself time to think through and not be rushed in making. Selling a business is stressful enough so avoid making it more stressful by thinking through key, obvious questions that you’ll have to have answers to before negotiating with a third party to acquire your company. Use time as a friend in getting prepared and increase the likelihood of achieving your future euphoric exit.
