Learn How To Prevent The Sale Of Your Business From Seeming Like Forever.

And now for another different, unique perspective. This story involves a business that was involved in supplying to government. Something that is fairly specialized. The owner ultimately sold it to another company involved in the same general area of activity, supplying to government.


On his first attempt he acted largely without using outside advisors. And he really didn’t have an internal advisory team capable of assisting. His reaction to this failed attempt was that it failed largely because he had overlooked something quite basic. Besides the fact that he lacked advisors experienced in bringing transactions to successful conclusions. It was something that an experienced advisor would have discovered quite early. The transaction failed to close because the prospective buyer didn’t have the money to close.


Something that every realtor in-training is taught very early. But this seller was not a realtor in training. He was someone who had built a successful business selling to the US Federal Government. The inability of a buyer to pay was never an issue as he operated his business. But in selling his successful business, he was doing something for which he had no experience or training. Something he was doing for the very first time. Little wonder he didn’t get everything right. And he really had no one to help him.


To say that he learned from that experience would be very much of an understatement. He learned that he didn’t have the experience or expertise to do this on his own. Those advisors that he had were not up to the task because they weren’t experienced in closing transactions.


To say that he learned from that experience would be very much of an understatement. He learned that he didn’t have the experience or expertise to do this on his own. Those advisors that he had were not up to the task because they weren’t experienced in closing transactions.


Leading up to the successful sale he assembled a team of advisors. Professionals who had done this kind of thing before. Many times. They all realized that there is an ebb and flow to negotiating and closing on the sale of businesses. Although they may have referred to it as a mergers and acquisitions transaction. They were able to pass on valuable insights about this ebb and flow to the seller at critical times.


An event or item that the seller could have interpreted as something that would derail the transaction, they saw differently. They saw it as an obstacle to be overcome. And better still, they were able to draw on prior experience, and suggest one or more ways to overcome the latest obstacle. They also realized that overcoming the latest obstacle did not necessarily guarantee smooth sailing from then on. They provided the seller with extremely valuable ongoing perspective on the way transactions progressed.


The seller was particularly complimentary about the investment banker who was engaged to find one or more suitable buyers and introduce them to the transaction. Those of you who have reviewed the information on this website carefully will realize that I refer these important advisors more generically as intermediaries.


The seller felt that this particular intermediary had done his job very well. The investment banker’s experience prepared him for midnight and other last minute negotiations, as the transaction slowly moved ever closer to closing. He understood that it was all part of the life cycle of a successful transaction, and getting paid. So he kept in the game and did it with good humour.


The seller’s main observation after reviewing the history of his attempt to sell his business, and of its ultimate sale centered on advisors. He observed that it is critical to the sale of almost any business to assemble the best team of advisors possible. If you have studied the relevant content on this site, you will realize that I hold a similar view.


Although my way of expressing it is that the best usually ends up costing less than something mediocre. That goes back to my own experience where a mediocre advisor dug a hole so deep he couldn’t get out of it. After weeks of digging, and thousands of dollars of our money, he finally threw up his hands and gave up. A superior advisor solved the problem in a couple of hours.


When asked to review the above for accuracy etc. this seller replied as follows: “The only thing I'd add is that in my first failed transaction, my primary advisor was my corporate attorney who had worked with the company for 10 years before the deal and remained in that capacity until the company was eventually sold. He was effective at corporate law but had no background/experience in M&A transactions for government services companies like mine. Using their regular corporate attorney and CPA for M&A deals is a common mistake that business owners make.”


For a broad overview of the information on this site, and how it can help you prepare you business for sale go to Free Report , and download a brief report. It will convince you of the importance of proper advanced preparation for selling your business.


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