Last weekend I was speaking at our Property Management Unwrapped conference about selling and buying businesses so this blog is a departure for me as it is a personal reflection on those processes.
Someone can sell a business for a variety of reasons; perhaps because they are retiring or maybe to join a larger group to access new customers, or perhaps to start a new challenge.
Likewise, people can seek to buy a business for a variety of reasons; to add a new service or product to an existing portfolio or to acquire a competitor.
One of the points I made in my talk was that, whether you are buying or selling, you need to know why you are doing it. The process of transferring a business is a stressful time as it adds new challenges to an already packed day and further work to a full in-tray. Having a clear idea of what you are trying to achieve is essential for managing that process since it allows you to cut through the ‘non-issues’ and focus on what is important.
For example, if you are looking to acquire a competitor, you may be concerned about the contracts of employment of that competitor and your ability to lock in key staff who manage the customers you are looking to acquire. You may also be concerned about the robustness of the contracts with those customers and whether they are transferable. You may not however, be overly concerned about your seller’s office accommodation, particularly if you are looking to merge the new business into your existing business.
So why is this important?
During the due diligence process, your professional team – lawyers, accountants, financial advisers etc – will be looking into the business you are acquiring or answering questions about the business you are selling. Speaking personally, there is nothing I like more than to present a perfect report with every ‘i’ dotted and every ‘t’ crossed. No business however - and this will not come as a surprise - is perfect!
So my top tip for a successful sale or purchase is to have a clear idea of what you are looking to get out of your sale or purchase (and what your seller / buyer wants) and direct your team to focus on the issues important to you.
I hope you find this useful and if you are thinking of selling or buying and would like help to formulate a successful strategy plan or see your strategy through to a successful conclusion, please do call me.