For an owner manager, selling your business can be a stressful and time consuming process and it can be easy for your attention to wander from day to day business operations. However, retaining a relentless focus on your business and its performance is absolutely critical when undertaking a transaction. Business performance typically comes under even greater scrutiny during a sales process and, for even the most strategic of acquirers, the profitability and performance of their prospective acquisition is key.
Justin Sparks, Partner at Springboard Corporate Finance, looks at how owner managers can keep their results on target whilst minimising the inevitable distraction of a sale process.
Keeping on track is all about planning and preparation. Most management teams will nominate point men to deal with a process, allowing their colleagues to stick to the day job and be briefed towards the end of the process. In smaller businesses, where this is less practical, introducing an experienced finance director as a consultant to lead preparations and work with advisors from the business side to manage a deal can work well and reduce that day to day burden.
We typically advise our clients to keep the circle of trust tight and try to avoid the inevitable uncertainty that a process brings. Incentivising key members of the team is important (and will typically be a focus of an acquirer). This, again, is a matter of planning and, here at Springboard, we see our role as guiding a business owner through these difficult practical decisions as early as possible in the preparation phase.
Inevitably, the announcement of a sale has the potential to affect team confidence and morale, which can in turn impact the performance of the business. It is imperative that messages delivered by the owner manager and acquirer to the wider management team and staff are positive and deal with the opportunities that a sale will bring to all stakeholders. A good owner manager will have made their decision on the right home for their business based on a number of factors and it becomes a matter of effectively communicating those reasons to each group.
In short, a sale process is stressful and challenging. With the right planning and tactical thought from an early stage, the risks can be managed and the focus on the end goal of delivering the right deal at the best price to the right acquirer can be achieved.