Preparation, preparation, preparation!
Most business owners simply cannot resist the urge to go out there and look for a deal. They know deep down that they have not thought through all the details, but are somehow hoping for a quick win, thinking that they just might know a shortcut to a great deal. Sorry to burst your bubble, but this is seldom the case. In light of that, prepare properly and be ready for the long haul, knowing that if a quick opportunity comes up you can take it, but not at the risk of other options that may be required as backup plans. So, what do I mean by preparation? Three things really: Firstly, do your numbers. Make sure you have built a business plan that truly presents what your business delivers for you, the shareholder, and what you expect it to deliver in the years ahead. What conservative adjustments were made in your audited financials that an acquirer would need to know about? Secondly, know how you want to present your business to interested acquirers. Your product brochures, website and financials only tell half the story – what is the other half that makes your business truly valuable in their hands? And lastly, who are you going to contact? How are you going to make sure you look outside the obvious and find the acquirer to whom your business is worth more than a traditional valuation? Get these right and you have set yourself up for success. In contrast, by giving in to the temptation to take shortcuts, you lose opportunities to get the most out of the deal.