Who do you want on your team?
Leading an organization through the M&A process can be a full time job. It can be a full time job in addition to the full time occupation of leading a successful company. How will you fit this into an already busy schedule?
Delegate. You hire a team of advisors who will offer guidance on the process, find the right buyer, and negotiate the sales contract.
The accountants will provide the independent audit, financial & tax implications. The attorney on the team will provide the necessary legal knowledge. The investment bankers will provide the analytics, write your company’s story for the “book” and then queue up a selection of buyers that meet your specifications, then oversee the negotiations.
After all, you are the expert in your company. You are not necessarily an expert in managing emotions, finance, tax law, contract law, indemnifications, insurance, marketing to financial and strategic buyers, or seeking capital. That expertise is available to you by assembling the team. Of course! Perfect!
There are many ways to select this advisory team.
You can solicit recommendations from friends and family you know and trust. You can contact others in your industry to explore the story of their merger or acquisition. You could have your assistants research the possibilities in your geographic area and market.There is always your in-house counsel or attorney on retainer or accountant, to consult.
Many, many family-owned and closely-held business owners employ these strategies.
Those options come with drawbacks.
Confidentiality is a challenge to maintain if you share with friends, family and others in your industry. How would your customer base be affected if word got out that your company was for sale? How would your employees react at the news? How much experience does your attorney, CFO, accountant, or commercial banker have in this type of transaction?
You have worked for years to build this company and create a legacy. You care about your employees and the well being of all. You want your customers to continue to receive the quality service you have provided. Finding a buyer who will align with your company and provide the best fit will take time. Maintaining confidentiality will allow you and your team the time needed to find that best fit buyer. Profitability maintenance is another important task throughout the M&A process.
Your team of advisors will fill the gaps in your knowledge and experience. Who will you trust to provide the guidance that you need to make a decision based on logic, desired outcomes and best fit? Choosing advisors is incredibly important. When you are in the midst of the disruption, managing the company AND negotiating with the prospective buyer for this once in a lifetime outcome, these advisors will be your foundation. Build your team with people who are not related, didn’t know your father or brother, aren’t trying to preserve their own position or have some other competing goal. Build your team on integrity, reputation, and expertise. As CEO, your legacy depends on it.
If you would like to give this topic more attention, contact me. We can explore the important first steps in establishing the Mindsets and Attitudes