Some organizations view success strictly as a vehicle to sell to the highest bidder for a handsome profit. Other companies are strictly against selling. There is a third category, which is probably a lot higher than anyone imagines. Companies that don’t really plan to sell…until a buyer unexpectedly comes calling. Some companies make a huge profit and have a happy ending in this last scenario. But, that isn’t always the realistic truth.
So, you need to know exactly where your Middle Market company is valued before offers come in. Why? Being possibly open for a sale means you could be led astray by offers. Or, that you’ll undervalue yourself. So, you’re better off deciding either to be open to offers or totally have no intention of ever selling.
Are You Getting A Fair Or The Best Price?
Let’s say you haven’t thought of or researched the sales process for your company. Then, how do you know the fair market value in the event of an offer? How do you know what is a fantastic price? Or, what just seems like a great number because you weren’t anticipating it? It’s pretty hard to put a price tag on something in the spur of the moment and you may find yourself very tempted depending on how things are going at that given time. To keep a level head and accurately evaluate offers, you need to know the true worth of your company.
Will Your Organizational Values Be Maintained?
Again, deciding if you are for sale is key to keeping an objective eye on sales offers and prospective buyers. If you are too emotionally excited about what you feel is a great offer, you might not be thinking about if the buyer actually fits with your vision for your company.
How will they treat remaining employees? What are their plans for growth or product and service development? What’s their customer treatment philosophies? Even when you no longer own the company, you likely will be at least tangentially associated with it for years to come. You want to be sure you are handing your baby off to a company whose policies and plans you agree with.
Are You Ready To Walk Away?
Read any business publication and it’s pretty easy to find at least a handful of articles about people who regret selling a company. It could be they weren’t happy in the long-run with the price or the new direction of the organization. Or, perhaps they weren’t really ready to walk away from their Middle Market firm. Or, didn’t realize all their goals and now don’t have an outlet for it. Making sure you are ready to be retired or start over or are fully “done” with your company can help ensure your satisfaction if you do sell.
While you are certainly within your rights to change your mind at any time, knowing ahead of time if your Middle Market organization is potentially for sale and what your current valuation is will help you maintain an objective distance as well as make sure your interests are protected.
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