You have finally decided to sell your business; the team is assembled to handle the transaction and there is nothing left for you todo. You have spent the last several decades building a successful business and now your fate is in the hands of your advisory team. Time to step back and watch the process unfold.
Nothing could be further from the truth. Now is the time to run your business better than ever, tweak all the imperfections, improve it everyday and pay attention to your key performance indicators. One of the most challenging things for an M&A advisory is managing the sale process while the business is underperforming compared to previous periods.
Our firm recently managed a client engagement and within six months the financial picture had drastically changed for the worse. When we broke the situation down, it became obvious that the seller had checked out of the business and the impact was devastating. The revenues dropped significantly which naturally caused the profits to tumble. We no longer had a healthy business to market and the prospect of a sale was dimming quickly.
Over the next 90 days the situation continued to deteriorate along with any buyer interest. The decision was made to suspend all efforts to sell the business. The owner took back an active role in the company and was faced with having to turnaround the situation.
We advise owners the day they decide to sell their businesses to double down on their involvement and improve the operations wherever possible, with the exception of making major changes or large capital investments.