When you are looking to make the decision to sell a business it is important that you are completely committed to making the exit before you enter the market. That means that you need to get all of the right people on the bus. So, if there is more than one person involved in the ownership or decision making of the company you need to make the decision unanimously. The reason for this is because when you enter the market, you need to have the commitment that you will sell when it is time to sell.
A company is set up with a board of directors, shareholders and a management team. Each of these roles are important because they have a key decision making point somewhere along the path. If those members are not all on board with the deal when the time comes for them to preform they could be detrimental to the success of the transaction. If a buyer spends the time and money to investigate your company and preform the due diligence necessary to make the acquisition, and then you back out because you are just not ready to let go, then you may lose interest years later when you really are ready to sell. You don’t want to burn those bridges that you will need to cross later.
It is also important that you prepare your company to sell by getting all of the skeletons out of the closet and that there are no issues that will scare away an investor. When a company begins the due diligence phase, all of the little issues the owners thought they would be able to hide come out. One example is a client who had a few key employees that were living in the country illegally. The company’s legal advisors recommended they keep the matters secret in hopes that the issues would be resolved prior to a sell, but they weren’t. Once the acquiring firm found the issues it backed away from the deal and never looked back. If the company would have worked out the issue prior to going to market, or even brought the matters to our attention we could have helped resolve the problem.