When it’s time to take some chips off the table:
Preparing your company for investment or acquisition

By Jake Jacobs, CPA

After decades of nurturing their life’s work, many business owners find themselves craving some liquidity and reduced risk. In any given industry, there are certain windows during which a substantial private company can leverage opportunities to sell a portion or all of the company.

Start by plotting out your goals two to three years in advance of your desired sale date. Is the second generation of management in place? Are they well-groomed? How will the team appear to an outside valuation expert?

Sit down with your advisors and home in on the few points of the deal that are most important to you: percentage of ownership, amount of liquidity desired, or the softer side – who you’ll be in business with. Beyond just the simple financial transaction, know what you want for yourself and your family as a result of the eventual transaction.

Navigating the road blocks

An inherently stressful process, preparing your business for investment or sale can be incredibly distracting. It’s easy to get caught up in the momentum and take your eye off the running of the business or the big-picture goals you began with.

It’s crucial to assemble a competent and collaborative team that can execute your transaction without letting egos get in the way. They must have a clear starting point regarding your goals, and be willing to constantly manage to those goals, never letting the transaction become bigger than the objectives.

Most importantly, the business of mergers and acquisitions is often more art than science. Collaboration and the right attitude can make the difference between a good deal and smooth transaction, and an ordeal that goes down in history. Align yourself with an objective team that has your best interests in mind and has the perspective to evaluate varying points of view at the most stressful of times.

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