Sunday, September 28, 2014

5 Ways to Increase Your Odds of Receiving an Unsolicited Offer

In any negotiation, being the person who makes the first move usually puts you at a slight disadvantage.  The first-mover tips their hand and reveals just how much he/she wants the asset being negotiated.

Likewise, when considering the sale of your business, it is always nice to be courted, rather than being the one doing the courting.  The good news is, the chances of getting an unsolicited offer from someone wanting to buy your business are actually increasing. 

According to the Q2, 2014 Sellability Tracker analysis released in July 2014, 16% of business owners have received an offer in the last year, which is up 37% over Q1.  Said another way, you’re 37% more likely to get an offer to buy your business today than you were at the beginning of the year.

Big companies are buying little ones for a lot of reasons and the current market conditions are accelerating their appetite: interest rates are low and stock markets are high, which provide the ideal platform for acquirers to realize a return on their investment from buying a business like yours. 

So how do you ensure you are on their shopping list?  Here are five ways to get noticed by an acquirer:

1. Win an award

Getting recognized as the “Widget Maker of the Year” by the Widget Makers Association is a great way to get the attention of acquirers in your industry.

2. Hire a PR person

Engaging a public relations professional to tell your story to the media can get you on the radar of buyers in your industry.  A lot of media relations professionals focus on the big mainstream publications, and while these are important, ensure that your PR firm also targets trade publication and industry-specific websites that are read by acquirers in your industry.

3. Host an event

Consider hosting an event (e.g., conference, tradeshow, summit) for your industry and invite representatives from potential acquirers to attend.  Being invited to an industry event can be flattering for acquirers and it is a good way to get them to notice you as an industry leader.

4. Join a board

If an executive from a company you think would make a natural buyer for your business is serving on a board of directors, consider joining the board.  Serving on a board together can be a great way for an acquirer to notice you and your company without you having to say you’re for sale.

5. Grab lunch

Consider inviting a senior executive from a potential acquirer to share a meal under the guise of discussing trends in your industry.  At the very least, you may glean some useful information about how big companies are seeing your industry evolve.  At best, your lunch mate may realize that your company could play a key role in helping them grow.

The sale of your business is a delicate dance where it is usually better to be the courted, rather than the courter.  Acquirers are on the hunt for new businesses, and having them notice you will put you in a position of strength when you get to sit down at the negotiation table.

Friday, September 12, 2014

Breaking Down Barriers

Are you passing your business on to the next generation?  Will you be selling to management or an employee group over time?  Would you like to maximize your net proceeds on a sale to an independent third party buyer?

Whether you plan on selling your business to an internal party over time or to an external third party for maximum proceeds, your success depends on how much effort you put into your planning and preparation.

Getting started is often the hardest part.  We learned from Newton that, “An object at rest stays at rest and an object in motion stays in motion….”  Excuses are your biggest roadblock to getting started.  It’s too early for me…  I’m too busy...  It’s too complicated…  It’s too expensive... and so on.

What’s really behind these excuses?  Understanding this may be just what you need to set in motion something that will “stay in motion” until your goals are achieved.  

Here are some tips for overcoming the most common excuses that are preventing you from getting started:
  1. Your mind - Your mind can be your main ally when it comes to achieving your goals.  If, however, your mind is not programmed for success, it will do more to derail your efforts than to help you.  Visualize where you want to be after you exit your business and how it will feel when you get there.  This will give you the motivation to act.
  2. Your fear - Change makes most of us nervous – even if it is a change in the right direction.  You may not be consciously aware of the fear you have over leaving your business.  Until you conquer this fear, your exit planning efforts will be blocked by self sabotage and procrastination.  Tackle your fears by believing that something must change, that you must change it and that you can change it.
  3. Your commitment - We live in a commitment-phobic world, so it's no wonder that people routinely abandon their goals.  If you truly want to achieve your goals when you exit your business then your commitment to the process is critical.  The margin between success and failure is bridged by your commitment.  Don't give up until your goals have been achieved.  If you don't give up, then you'll never fail.  There are two options in life, excuses or results.  Which do you want?  
  4. Your patience – Exit planning takes time and there are a number of issues to address.  It took time to build your business and it will take time to exit the business – that is if you want to exit on your terms.  When you find your patience wavering, review your goals - are they specific, measurable, realistic and attainable?  Remember, slow and steady wins the race.  You will be surprised with how much can be accomplished within a three year period after 12 quarterly meetings!
  5. Your support network – Taking on this task alone will leave you less challenged, less accountable and more likely to fail.  There are many helpful resources out there.  Reach out to experts to assist you through the process.  Do some research and speak with colleagues and/or other business owners that have been through the process successfully.  Surround yourself with positive and supportive people.  Look for a professional advisor with exit planning credentials and experience to guide you through the process and involve the specialists where and when needed.
Contact us at or to help you kick-start the exit planning process.  We can help you set your exit plan in motion and assist you with the implementation to ensure you exit on your terms at a time of your choosing.

1.  Inspired by Daryl Devonish, Co-Owner, Body Pump Inc. ( 

Monday, September 01, 2014

Will Your Goals Be Thwarted by These Excuses?

All business owners exit their business eventually.  Planning is critical if you want to ensure a successful transfer of your business - whether that transfer be internal (i.e. to another shareholder, a management group or the next generation) or external (i.e. to an independent third party).

According to a recent CFIB study, less than 10% of business owners have a formal written plan, 40% have an informal plan and over 50% have no plan whatsoever. [1]  Why have so many business owners avoided planning their exit?  

Does this include you and, if so, what is holding you back?  Here are the top 5 excuses that prevent business owners from beginning their exit planning:

Excuse #1: It’s too early for me to plan for succession

Fact: It is never too early.  Planning should begin at least 3 to 5 years prior to exit because there are many issues that require time to adequately address.  Identifying your exit option early (e.g. internal or external) is extremely important.  Identifying how much you will need financially when you exit is critical.  Allowing sufficient time to enhance the value of your business and ensure proper tax plans and structures are in place to minimize tax on the transfer before exit is also vital.  Beginning your planning early could mean the difference between success and failure.  

Excuse #2: I’m too busy 

Fact: You are never too busy to do that which is important - it’s a matter of prioritization.  If ensuring a successful transition to the next generation or maximizing your net proceeds on the sale to a third party is important to you then you will make time for the planning that is necessary to ensure these goals are achieved.  If you are truly serious about meeting your transition goals and understand the importance of planning then you will make it a priority.   

Excuse #3: It’s too complicated and I don’t know where to begin 

Fact: It can be complicated but that has not stopped others from starting their exit planning.  There are many helpful resources out there.  Reach out to experts to assist you through the process.  Do some research and speak with colleagues and/or other business owners that have been through the process successfully.  Surround yourself with positive and supportive people.  Look for a professional advisor with exit planning credentials and experience to guide you through the process and involve the specialists where and when needed. 

Excuse #4:  It’s too expensive

Fact: Exit planning is an investment that should form part of your “wealth management” budget.  You pay professionals to “manage” your portfolio of publicly traded securities.  According to The One Percent Solution, privately held business owners should invest 1% to 2% of the value of their business each year on exit planning initiatives (e.g. business valuation, value enhancement initiatives, life insurance, tax and estate planning, etc.) [2]  This investment will pay off in the form of a higher business value (or price received) and less taxes paid, resulting in more money in your pocket - not to mention the decrease in stress knowing that your affairs are in order.  

Excuse #5 – I don’t want to think about leaving my business

Fact: You may not want to think about leaving your business but you will leave your business one day.  The departure from your business will be voluntary at at time of your choosing or it will be involuntary as a result of your death, disability, disaster, divorce or disagreement.  Would you rather exit your business on your terms or have your family deal with your unexpected forced exit?  Who will run the business?  Will it be salable?  Will it be dissolved?  Will there be taxes to pay?  Start planning now so you can choose while you still have the control to make a choice.     

If you would like to sell your business within the next 5 years, you have a tremendous opportunity to sell for a significant premium - provided you conduct the proper planning!  Those business owners that ignore planning could end up selling for a significant discount or face liquidation altogether.

Are you part of the 50% of business owners that have no plan whatsoever?  If so, what is holding you back?  Join me next time when we address how to overcome what is holding you back.

1. Source: CFIB Research Report November 2012 “Passing on the Business to the Next Generation”
2. Source: The One Percent Solution, Z. Christopher Mercer, 2007.