By John Binkley
Success is something that rarely happens overnight. Sure, some may be lucky enough to find that winning lottery ticket or stumble into a game-changing idea, but I wouldn’t advise pinning your future on either of these outcomes.
Success is a process.
It takes a lot of effort, a lot of investment, and a lot of patience. However, that makes reaping the rewards at the end so much sweeter.
The patience you’ve relied on throughout your company’s life shouldn’t abandon you when the time comes to sell your business. Yes, of course, you could sell your business in a matter of weeks or months to an employee, partner or competitor down the street – it happens all the time.
However, these deals are often unfavorable to the seller. The price is lower than it could be, the deal structure is terrible, or they get stuck in an earn-out with unrealistic targets. All because they proceeded without questioning whether their business was truly ‘buyer ready’.
Building a buyer ready business takes patience – and as is often the case, good things come to those who wait.
Exiting a company is a process, not an event. While it all eventually comes down to the exciting moments of signing documents and shaking hands, this is only possible after months and years of careful planning, strategic and tactical growth, and clear guidance by an experienced M&A advisor.
Without utilizing time and expertise, there are many ways that your exit can fail to fulfill its potential:
These are just a handful of the pitfalls an inexperienced, impatient, or unprepared seller can trip into. Remember: It is never too early to start planning your exit and building a buyer ready business. Even if you have no intention of leaving for several years, laying this groundwork early will put you in a great place to time your exit to perfection, and make this process as efficient and valuable as possible.
That’s what our team at Generational Consulting Group (GCG) specialize in – advising businesses on how they can achieve meaningful, consistent growth, to both enhance their prospects and present a more attractive proposition to buyers later in the journey.
There are two approaches our consultants take to optimize a company’s growth – Strategic Growth Plans and Tactical Acceleration Plans.
A Strategic Growth Plan (3 to 5-year strategy) focuses on long-term improvements. This defines the steps to realize your ambitions and gives both your team and potential buyers an extended vision for your company and how you intend to get there.
A Tactical Acceleration Plan (3 to 12 months) concentrates on short-term improvements to profitability, cashflow and company performance. This approach is best suited to businesses that are underperforming and need immediate tactical guidance.
Both techniques are key to purposeful business growth that lays the foundation for a buyer ready company. Entrepreneurs are purchasing your company’s future, not its past. To maximize the potential value of your exit strategy, it is vital that you can demonstrate your business is growing and how it will continue to thrive once the sale is complete.
If you want to know more about our growth strategies at GCG and the difference it makes to companies ahead of a future departure, I’d urge you to watch some of our client reviews:
Enhancing the value of a business and ensuring it is ‘buyer ready’ is often the longest phase of the exit journey. That’s why you should take people’s estimates of ‘5+ years’ to achieve an exit with a pinch of salt. If you lay this groundwork early and continually focus on building your company for an eventual exit, you can save a significant amount of time down the road.
What does this mean? It allows you to time your departure better, and engage with an M&A advisory firm when the market conditions are ideal.
There are still many steps owners have to take, discussions to have, and hurdles to jump before it’s the optimal time to exit. These can be prolonged in several ways:
From the time it takes to target, engage and attract prospective buyers, to the questions to answer in due diligence, the journey to exit can be a real test of patience. Therefore it is vital to have a trusted, experienced M&A advisor by your side. They’ve walked this journey countless times before and know the best way to navigate it!
Investing in an experienced team supporting your exit strategy helps ensure that the patience needed to fulfill your ambitions is worth it in the end. In addition, having true professionals will enable you to meet all of your milestones:
With an expert team by your side, you can make sure that your business continues to thrive (which is so critical in the months preceding your exit), and that your exit is on schedule. This prevents your departure from being prolonged or mismanaged.
While you may be eager to start life after business or disheartened by the estimated amount of time it takes to exit a company, I hope this helps to reassure you that a mixture of patience and planning ahead can make all the difference to your financial future and your company’s legacy.
Whether it is taking the time to grow the value and stability of your business in the years leading up to an exit, or reaching out to a professional experienced M&A advisory firm – the time you spend here will pay dividends when the transaction is complete.
I can assure you that by investing time and resources in profitably growing your company and securing the right guidance today, you are giving yourself the foundation for an optimal exit tomorrow.
If you are interested in learning more about the steps involved in exiting a business, I encourage you to attend a Generational Growth and Exit Planning Executive Conference.
Our educational conferences provide business owners with powerful, strategies to maximize company growth and achieve a successful fulfilling sale. Register now if you’re interested, or you can find more useful information in Generational Group’s regularly updated Insights.
Dr. John Binkley
Chairman & Founder, Generational Group
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.Ralph Noblin, President of Noblin & Associates
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.Andy Graham, Vice President, Modern Heating & Plumbing
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).Bil MacLeslie, CEO, ipHouse
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.Betty L. Brennan, President, Taylor Studios
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Generational Equity’s assistance was invaluable in compiling and marketing our business.Bil MacLeslie, CEO, ipHouse
We thank you Eric and Generational Equity making our dream come true.Larry Moore, Owner, A Company Portable Restrooms
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.JoAnn Ellis, Owner of Fondren 5 Star Kennels
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.Shane and Johanna Kline, Owners of Vision Upfitters
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!Eric Erlandson, Owner, Action Fastenings, Inc.
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.Larry Moore, Owner, A Company Portable Restrooms
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.Robert Evans, President and CEO of Mealtracker Dietary Software
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.Jay Dinnison, Owner of Sharpe Mixers
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.Salvo Stoch, Founder and CEO of Sleeping Partners
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward. P.S. Given my experience with GE I felt comfortable enough to sign up with Generation Wealth Advisors!Tom Currier, Former President & CEO, Rackmount Solutions
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.Bil MacLeslie, CEO, ipHouse
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!JoAnn Ellis, Owner of Fondren 5 Star Kennels
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.Caroline Connelly, CEO, OptoTest
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.Rick Greene of Dobbs Equity Partners LLC
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.Jay Dinnison, Owner of Sharpe Mixers
Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.Pete L.
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.Robert Evans, President and CEO of Mealtracker Dietary Software
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.Terry D. Wickman, President, Keytroller
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.Terry D. Wickman, President, Keytroller
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.Bryan D. Horn, Owner, Over Under Clothing
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