So You Want to Successfully Sell Your Business? Don’t Forget the Missing Link

Statistics show that many companies, particularly of the privately held small to middle market variety, simply are not ready to be sold once ownership decides to pull the trigger and enter into a potential transaction process. The investment banking community is full of examples of clients desiring to sell and/or with deals on the table only to see them collapse during due diligence, if not before, because of false value expectations or simply a lack of strategic organizational structure and execution capability. Clearly, such sell side companies arrive on the radar screen of strategic or financial buyers alike for one reason or another…..(1) market position, (2) proprietary product(s), (3) financial strength, (4) roll-up strategy, (5) backlog buy, (6) talented personnel, etc., etc. These attributes are typically quite visible in the marketplace and are pivotal to any potential transaction. But it is what can’t be seen at the expression of interest, management presentation, plant tour, or letter of intent stages, that can and typically will sour the deal to some degree or perhaps even in total. So what is the “missing link” to a successful and satisfying negotiation, due diligence and close process for all parties? As a private business owner, CEO, and having personally experienced both the buy and sell side of transactions in my 35 year career, I propose that a robust growth strategy development and execution management process is a must. Fortune Magazine reports that – 85% of executive teams spend less than an hour per month discussing strategy Only 5% of the work force understands the strategy Further 9 of 10 companies fail to execute strategy which perhaps is due to – 60% of organizations not linking their budgets to strategy Only