Exit Planning Mistake 2 – Going Alone

By Generational Equity

07/13/2016

Last week we started a blog series examining some of the critical exit planning “miscues” that we frequently encounter when we meet with business owners. Our first piece discussed the critical need to ensure that you maintain focus on operating the company while at the same time negotiating with buyers. Because if you don’t, it will only hurt your negotiations with buyers if the business begins to miss its forecasted revenue and earnings.

In that article we made reference to the second exit planning mistake, which is what we will cover in greater detail today: not using professional exit planning advice.

Certainly businesses are bought and sold every day without the use of M&A professionals. And if you are a serial entrepreneur and have successfully sold a couple of businesses already, you most likely have the experience necessary to do so again.

However, most business owners will sell only one company in their entire career. This is definitely not something you want to learn the hard way by learning from your mistakes. Without M&A guidance from a professional, you need to budget at least 8-14 months and 1,000 hours of your time. In addition, you need to be financially savvy and have thick skin to avoid taking hard questions from buyers personally.

By and large our clients tell us two things after we close a deal for them:

1. I had NO idea due diligence would be so painful.
2. There is NO way I could have closed the same deal without your help.

Keep in mind that each of the clients in the videos above is an extremely talented CEO and owner. Many are recognized experts in their particular industries. But each of them was wise enough to realize that when you are trying to monetize your greatest asset, you need to do it right, and if you want an optimal deal with a premium buyer, you will need help finding them and negotiating with them.

This is the real benefit that our firm and our deal teams bring to clients.

Make the Investment to Avoid Mistakes

Mistake No. 2 is simply making the assumption that in order to save some money, you are going to spend a year or more plus a 1,000 hours of your time finding a buyer. And, by doing this, in many cases, you will also make mistake No. 1 and take your eyes off the daily operations of the company.

Do you see how circular these two mistakes are and how they feed off of each other? One naturally leads to the other. And before you know it, not only have you not sold your company, odds are good your revenue is down 25%, your confidentiality has been breached, your key employees are upset, and rumors are flying.

Not the way you want to go!

Here is the alternative: Hire a reputable, experienced firm like Generational Equity to represent you. Our track record speaks for itself. 

To learn more about how we can represent you, please reach out to me, Carl Doerksen, Director of Corporate Development, at 972-342-0968 or cdoerksen@genequityco.com and I will get you in touch with the appropriate folks to discuss your next steps.

And because most business owners have no idea what the M&A process really looks like, we offer complimentary exit planning seminars that walk you through the system from A to Z. We find that it is far better for our clients to understand what will be occurring over the next several months than to enter our system blind.

Reach out to us and we will help you out as well!