As an investment bank, the most critical part of our job is the first interview. This meeting is a two-way street, meaning that each party is there to determine if the prospective engagement is right for each party.
Far too often a business owner(s) thinks he wants to sell, without fully exploring the consequences. We suggest you consider if one or more of the following is fomenting the sale as a solution.
- After many years, owner in-fighting is wasting far too much energy and causing similar angst. A total sale of the company seems like an optimum result. Alternatively, perhaps one owner is best suited to buy out the other(s).
- The company receives an unsolicited "offer" to negotiate a buyout. At least this overture has started the thought process in the direction of a sale. Unknown to the potential "seller," less than 10% of these initial contacts result in substantive negotiations, let alone a sale.
- The primary owner feels pressure from his family to spend more quality time with them. This progression to "quality time" is more a myth of the many gurus who think there really is a balanced work-family-play life ideal. People spend time on things they are passionate about, period. Everything else is a workaround.
- The friend who just sold his business for a handsome price is the instigation to consider a sale. Is this a me-too consideration, a "one-up" scenario, or a real reason to be serious about a business sale?
- Lastly, an owner(s) wants to "test the water" as to whether the timing is right to monetize his ownership.
When we clearly see any of the above rationales for selling, we delve into the strength of the emotion promulgating the interview. Nether party should enter into a costly and lengthy sale process without a 100% commitment to fully and wholeheartedly participate and cross the finish line of success.