Define Your Goals Before You Sell

Define Your Goals Before You Sell

The first and most important steps to take before selling your business are A) analyzing your own goals for wanting to complete a transaction; and B) deciding on the right type of deal to aim for. These steps are crucial because they will define how you prepare for the transaction and how to best structure your company for a successful sale.

Generally, business owners in the middle market have one of two entirely different
 reasons for wanting to sell. The first is the more obvious in a country seeing an
aging baby-boomer population, and that is retirement. The second is that the
ownership group has reached constraints in the company’s growth and needs
a partner to help remove those constraints in order to quickly grow the
company. These limitations can include: the inability to raise capital, a lack of skills
and/or infrastructure, or an unwillingness to take additional risk.

Since many middle
market companies grow from the heart, soul, and wallet of an individual entrepreneur, there is often a transition that takes place at some point in the growth period of a successful middle market company to bridge the company from individual ownership to a more institutional company.

Depending on whether your goal is one of these reasons or a combination of the two (partners of unequal ages, family transitions, etc.), you’ll want to carefully consider what you are trying to accomplish with a transaction before diving into the M&A process.

Michael Schwerdtfeger
Mergers & Acquisitions
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Michael Schwerdtfeger is a former engineer, Fortune 500 lawyer, and MBA. After almost 20 years in the Fortune 500 marketplace, he chose to work in the middle market space beca ... Click for full bio

Don’t Be Tempted to Persuade Your Clients

Don’t Be Tempted to Persuade Your Clients

Recently, I've been seeing a lot of articles about Advisors persuading clients to move from active management to passive management. Persuading clients to follow the way you manage investments is a big mistake. Do this instead.

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Paul Kingsman
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Paul Kingsman helps financial services professionals overcome distractions to achieve success sooner. Combining his experiences as an Olympic medalist and his background as an ... Click for full bio