Why You Should “Run to Sell” Your Business [M&A Musings #1]
Welcome to a new series, “M&A Musings,” where we’re sharing our insights on mergers and acquisitions after decades in the space. If you run a business and want to learn more about what makes a successful M&A transaction, keep reading!
During a recent business partner meeting, Mike and I also discussed a commonly held belief here at Blueprint. It’s one we regularly share with our clients.
If you run your company as if you intend to sell it, whether you end up selling or not, you will have a more valuable business!
Preposterous? No, not really. Here’s why…
3 Reasons You Should “Run to Sell” Your Business
When you’re in the heat of the battle, the idea of selling and possibly leaving your company in someone else’s hands seems unthinkable.
Yet acting as though you intend to sell your business will indeed take it in a good direction, if you follow a few guidelines.
Why is it beneficial to “run to sell”? Here are three reasons.
1. Knowledge
When you know what “running to sell” means, you can act to build a better company through those reinforcing actions. In turn, you will increase the value of the business.
Here are just a few factors that can influence your business value:
Strong profits
Solid management team
Robust and connected systems
A well-thought-out and documented strategy
Contracts with your customers and vendors
A positive company culture
At Blueprint, we understand how important each of these factors is. We help clients in these areas all the time in order to increase their business value.
2. Focus
Focus comes with committing to a goal.
When you act purposefully as though you are going to sell your business, you naturally become more focused — which results in better outcomes.
Many companies lack focus because the principals don’t think about a potential end game.
Selling or not, you’ll be more focused if you and your entire team know your long-term goals and commit to reaching them together.
3. Discipline
Getting ready to sell your company demands discipline, or you will fall short of your goal. The rigors of having a potential buyer look closely at your company can expose weaknesses and value destroying factors.
By being disciplined and addressing these vulnerabilities in your company now, you will inevitably create more value.
What a Buyer Ultimately Wants
What a buyer wants by purchasing your company is sustainable cash flow.
By taking the knowledge you gain “running to sell,” you will improve the focus and discipline with which your company operates. In so doing, you will certainly increase your business value.
Having a valuable business provides options for the owners. Maybe you want to sell… maybe you don’t. Either way, you have a strong asset in your portfolio, and you’ve put yourself in the driver’s seat for the rest of your career.
Plus, the lives of your employees will also improve because they are part of a thriving business.
Maybe now is the time to start running to sell…?
Want Help Building Your Business Blueprint?
If you’d like help learning how to structure your business to “run to sell,” let’s set up a meeting and discuss the best path forward for you.
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