Six Degrees - How Not to Sell Your Business!

Dear Reader

Would you one day like to sell your business, make a lot of money and retire? We have five laws to share with you that govern the process, so that you can make your plans early and avoid the pitfalls.

Please forward this issue to anyone else you think will find it useful. They can subscribe to receive their own free monthly copy by clicking here.

Best wishes,

Tony Maynard at CMC

(07774 982596)

Tony@cmc-partnership.com

Maynard’s Five Laws of Successful Company Disposal

In our experience, these five laws govern the process of selling your business – ignore them at your peril!

1.  The Law of Delayed Action

Most business owners keep the notion of selling their business in the back of their mind until it's too late to make a good job of structuring and preparing it for sale. Whatever your current situation, give it some thought - now. Set a target date and include some preparation for selling your business in your current business planning. It may surprise you that, as a general rule of thumb, five years is not too much time to make a really good job of preparing for the sale.

2.  The Law of Unreadiness

From the moment you decide to sell, you must regard the business differently. Potential buyers want it solely for its asset value; you need to see it through their eyes. Conduct an objective 'audit' and make changes to get the right image, feel and performance. Some things will undermine the sale or reduce a potential sale price, others will add a premium. All this preparation takes time.

3.  The Law of the Jungle

Businesses can be picked up for a bargain price when the owner urgently wants a quick sale. Some buyers are like vultures, looking, not for a healthy business that will fit into their portfolio and long-term plans, but for signs of ‘sickness' that will allow them to drive the price down. Such signs include ‘skeletons in the closet', a weak management team and too much dependence on you as the current owner (see our May 2009 newsletter).

4.  The Law of Increasing Avarice

Once launched on the selling process, some business owners start seeing £££ signs, and lots of them! A properly-prepared business attracts serious buyers who actually want to buy something in a healthy state and take care of it. But be prepared to take advice from the experts in establishing the right price. If you insist on holding out for a higher price, you can miss the moment and end up having to sell at a considerable discount.

5.  The Law of Uncertainty

The moment you decide to sell, the business changes from being ‘your baby' to being an asset. To get the best value you can for this asset and to take care of its long-term future, you must let go of your emotional attachment. Otherwise, there's a danger you'll get cold feet at the last moment and scupper your chance of a successful sale.

To explore the issues well in advance of the time you want to sell, call me on 07774 982596, or send me an email: Tony@cmc-partnership.com, and I'll be happy to talk it through with you.

Enjoy the Journey!

A gentle and humorous reminder that since growing and preparing your business for sale may take longer than you think, you'd better enjoy the process!

A businessman in a small Mexican fishing village saw a small fishing boat. He complimented the fisherman on his fish and asked why he had only caught a few. The fisherman said he had enough to support his family's needs: “I sleep late, fish a little, play with my children, take siestas with my wife, and each evening stroll into the village, where I sip wine and play guitar with my amigos. I have a full and busy life”.

The businessman, a Harvard MBA, scoffed. “Here's what you should do: spend more time fishing and buy a bigger boat. With the proceeds from the bigger boat, buy more boats and eventually a fleet of fishing boats. Instead of selling to a middleman, sell directly to the processor, eventually opening your own cannery, so you control all processing and distribution. Leave the fishing village and move to the capital to run your expanding enterprise”.

The fisherman asked, “How long will this take?” Told, “15-20 years”, he asked, “What happens then?”

The businessman laughed. “That's the best bit! When the time is right, you announce an IPO and sell your company stock to the public. You'll make millions!” “Millions?” replied the fisherman. “Then what?”

The businessman said, “Then you retire. Move to a small fishing village and sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings to sip wine and play your guitar with your amigos”…

If you'd like to know how to grow and eventually dispose of your business - or just to have a chat about whether it's even the right path for you - give me, Tony Maynard, a call on 07774 982596, or send me an email: Tony@cmc-partnership.com.

I'll be happy to explore with you what's involved, whether you'd enjoy the journey, and whether you have planned adequately for life after selling your business.