I have been repeating these three things over and over lately everywhere I have an opportunity. What are the 3 most important things you need to get right in order to sell your company? Not only to sell it, but to get a premium?
1. The management team 2. The management team 3. The management team
Yes, the top three things are all the same. As a matter of fact, this is so important, an entrepreneur from Egypt told me a week or so ago, he changed his business card from managing director to owner. In concert with this change, he has started developing a new managing director for his firm that is not him. Yep, someone who is not the owner.
Will people buy your business and give you, the owner a job going forward? Yes, but that is never Plan A, it’s a negotiating concession. If you are getting employment as part of the deal, you are probably not getting a premium sale price.
Having a highly competent management team, a buy-out of the business (no employment going forward) and a non-compete in the same industry probably gets you top sale price.
So, if you want a premium for your business some day, you need to put some sweat and effort into developing a highly competent management team to grow and run the business that is not you.
The management team will create the brand. The management team will service the current customer base. The management team will cultivate new customers. The management team will create and maintain the growing culture. The management team will have a differentiating strategy. The management team will make sure you have adequate cash to live and grow.
What will you do?
Cash your check and move on the the next phase of your life.