At this time in our Building a Sellable Business series, we’re getting to the point where it’s time to promote it and make it attractive for its sale. You’ve built your company into a valuable asset, and you’re ready to sell. If you’ve found a potential buyer and compiled your business’s “play book”. You’re ready to make your sales pitch. All of your years of hard work have come to fruition, and you get one opportunity to make the biggest presentation of your life. Ultimately, your Business Sales Presentation has to be flawless so that the buyer sees your company the same way you see it. This is where you put the “sales into the sale.” You want to do such a good job presenting your company to the potential buyer that he will make you an offer, and a fair offer at that.
I’ve been on both sides of the business sales table. If you remember, I’ve sold three of my businesses thus far. But as a CERTIFIED FINANCIAL PLANNER™, I’ve also helped countless clients sell their companies or purchase companies. In fact, one particular business sale stands out in my mind.
Early in my career, some 15 to 20 years ago, I acted as a financial advisor for a particular client looking to buy a business. When my client’s team and I sat down across from the seller, we were impressed by the “army” she had assembled. I mean, professionals and team members filled the whole side of her table. She was ready to convince my client that her company was worth his money.
“You’re about to make the biggest deal of your life. Don’t you want to cross the finish line?” – Justin GoodbreadClick to tweet
I’ll never forget what I learned in that particular day. During a break in the business sales presentation, the buyer, his CPA, and I sat in the hallway talking about what we had just experienced. As we mulled over the seller’s pitch, the seasoned CPA addressed us and said, “Boys, if we end up liking this company, we have to move fast. The buyer has made a big mistake.”
Young and naive, I blurted out, “A rookie mistake? Dude, she’s got an army with her!” Yet, this CPA continued, “Nope. She’s put her best people at the table.” I can still remember looking at him like a calf looking at a new gate. “Why is this a mistake?” was the only question I could verbalize. I just couldn’t put it together.
If you’re like I was, you’re probably wondering why having the buyer’s best people at the sales presentation table was a mistake. If you’ve gotten to the business sale, don’t you need the team members with you who have helped you reach this finish line? I mean, you’re about to make the biggest deal of your life. Don’t you want to cross the finish line?
Well, let’s think about it. If you’ve followed my advice in this series, you’ve hired a good CFP®, a good attorney, and a good CPA. You may even have hired some transition experts and a valuation expert. Sure, you’ve built a great team, but what happens next? Well, you go into your company and grab your division heads – your CFO, your CEO, and your department managers. You probably think that your team will handle this sales presentation with you. After all, you need the best-of-the-best putting in the MANY hours required to bring this sale to the “pay-out” you desire.
While your professional consultants respond to the buyer’s questions, your company leaders are left scrambling about, trying to keep up with the documents, guided tours, phone calls, and entertaining every whim of the buyer’s team. Yet, the rest of the company is left unattended for the many hours, days, and months your team leaders are preparing for and attending these meetings. Performance falls. Customers leave. Revenue plummets.
Because you pulled your leaders, the people who run the company, out, your company begins to suffer. That can be devastating. And it could cost you your biggest “client.” You could lose some of your best employees. Heaven help you, you could even lose some of the key players on your transition team. And don’t think for a second that the buyer doesn’t recognize what’s happening. He does. He will, and he could possibly end up walking away, leaving you to pick up the pieces of what’s left of your company.
“Your ultimate goal is to keep operations running in such a way that your company’s worth does not diminish during its sales process.” – Justin GoodbreadClick to tweet
What do you do, then, to avoid making this rookie mistake during the sales presentation process?
Well, you hire consultants and non-critical personnel. Long before you reach this presentation point, you’re going to hire and train people to learn your management systems. You’ll teach them how every department in your company operates so these consultants can either come to the business table with you or keep the company running smoothly while your original team comes with you. Your ultimate goal is to keep operations running in such a way that your company’s worth does not diminish during its sales process.
Yes, you will have to spend some extra money. But as my CPA friend told me, “I can calculate the expense of hiring the employees that we need. What I can’t calculate is the potential devastation of making this rookie mistake.”
By this time, then, you’ve assembled your internal and external team players for the sales transition period. You’re not going to make rookie mistakes. AND you have your playbook ready for the potential buyer. What next?
The sales pitch! You’re going to have to try to sell the company so that a sale takes place. Your sales pitch has to be so strong that it convinces the buyer to make you an offer. More than that, you want the buyer to offer you what you think your company is worth.
Remember, the buyer’s team is ready, too. They’re sitting across the table with a red pen, taking notes, waiting to get a toe-hold in the cracks of your business sales presentation. They know your company is valuable, but they want to find reasons to offer you a lower price to save themselves money.
So how do you prevent cracks from showing during your Business Sales Presentation?
So I say, “Congratulations!” You’ve reached the point now where you’re actually making the sales pitch to sell your company. You have one shot at this. Prepare yourself. Prepare your team. You’ve done well up to this point; you can do this, too!
Next article we will be discussing public auction vs private sale – the pros and cons of each when entertaining offers for your business.
Like I always say, life is hard. Life is complicated. Money doesn’t have to be. Let’s continue to make our lives, at least, financially simple.