Selling My Company
- How should I sell my company?
- How do I get the valuation that I deserve?
- Should I sell to a private equity (P/E) firm?
- Should I call a business broker?
- Do I hire a consultant?
- Should I go it alone?
How do I go about selling my company?
Many articles on the internet suggest that you find a business broker or an investment banker. Some steer you towards a private equity firm.
Why are you selling your company? Do you have intellectual property and want to sell it?
Do you just want out maybe because you are ready for retirement?
Maybe your health is failing and the company needs you to operate. There are many reasons why people sell believe it or not. Are you looking for an EXIT? This is actually one of the biggest questions.
Annoying and Distracting “buyers”
You likely get email after email every day asking you if you want to sell your company.
Some of these emails even point out specifics to your offering…such as…We have a buyer of solutions just like yours that are cloud based, etc etc etc. Then when you talk to them you realize that they are full of $%#@BS.com
Then there are the companies, and some seem large and credible, that offer these ‘very important to you’ seminars in your market.
They offer an educational series which is designed to provoke you based on some high valuations that others received selling their company.
Most business brokers cast a wide net.
They take your information and candy coat it a bit, add your financials and then cast it out there for people wanting to buy a business. Most business brokers will advertise your business on a match-making site.
- Are you looking to buy a manufacturing company?
- Are you looking to buy a job, your last job?
- Are you looking for a company that affords recurring revenue?
- The Owner is retiring to Florida and selling his company?
Most business broker sales allow the owner to retire and leave after some transition period.
The Private Equity (P/E) Sale
P/E companies tend to want to build a portfolio of companies. All you have to do is look at their web pages. Some even focus on a particular industry such as Retail or Healthcare. In most cases the leadership team is kept on board.
There are some advantages such as a centralized HR department or centralized marketing services.
P/E firms are like bankers, show them your Balance Sheet and Income Statement and they will offer you 5 times Net Income. If you get more than that you’re lucky.
The No-Look Sale
Some do not set out to pursue a buyer, they partner with strategic partners and then just get an offer from their “strategic” out of the blue seemingly.
This happens because the strategic wants one’s Intellectual Property or they want their Sales Revenue or their “potential” Sales Revenue.
The Intellectual Property (IP) Sale
If you are fortunate to have an IP you likely will get a higher valuation that others.
P/E offers somewhere around 5 times net income. For most this is barely enough to retire on.
With IP that your buyer can use to corner the market, win market share, be more competitive, etc…you will likely get many times net income. But you still need to SELL it.
Should I go it alone?
No!!! Anyone can sell their company. But how do you get what you deserve.
Do not go it alone unless you are just a super sales person. Not unless you are a poor sales person and just want to float your financials and get offers.
Sure you can sell your own company, but you likely will get less than what you thought your valuation should be. Shouldn’t you consider creating some competition, attempt to get a higher valuation?
Even Real Estate people have open houses to create a since of urgency and then to show buyers the competition to raise the valuation.
How do I Raise my Valuation?
- How do I get multiple offers?
- How do I find someone that appreciates my IP?
- How can I get what I deserve?
- How do I Exit?
There are companies and/or consultants that help you do just that:
- Sell your IP
- Identify the Strategic Partners that appreciate the IP
- Package your company up for sale
- Position your company for the Buyers so they understand the value
- Help you build top line revenue and a sales pipe with marquee accounts
- Put all this into future revenue for the eventual buyer
- Role-play with you so when you get your one chance you don’t blow it
- …and then…aggressively sell your company, and not just the financials
- …and then
Do not just sell your financials…
Get You the Valuation that You Deserve.
Have a solid EXIT Strategy.
If you have your own Intellectual Property yet your net income could be better maybe you should consider a consulting company that will work with you to get the valuation that you deserve.
XIT Group does just that. We do have an affinity to Supply Chain, Automation, Robotics, Industrial & Factory Automation, but we are happy to talk with you to help you out.