In Part 1 of this series, we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with an inquirer if you decide to investigate a specific opportunity, including important mistakes to avoid and information you should gather.
This is Part 2 of a three-part article series. In Part 1 of this series, we examined how to handle the stream of inquires that you may receive about potentially selling your business. We also discussed how to conduct an introductory call with a inquirer if you decide to investigate that opportunity, including important mistakes to avoid and information you should gather. Finally, we left off with asking the potential buyer to send a non-disclosure agreement (NDA) if you wish to continue the discussion with that party. From this point, let’s look at the next steps.
If you are like most business owners, you probably receive a regular flow of emails and phone calls seemingly offering to buy your company. Private equity (PE) firms and strategic buyers are sitting on record amounts of cash and must make acquisitions to hit their business objectives. Everyone is waiting for the flood of baby-boomer business owners selling their companies, but it never seems to come. As a result, there is too much money chasing too few acquisition opportunities. While this is generally a good thing for business owners, a stream of unsolicited offers or inquiries can grow into an unwelcome time sink if not handled correctly. Also, if you are not careful in how you respond to these offers, you can harm your company by potentially sharing sensitive information with a competitor or sparking rumors that your company is on the market. So, what steps should you take when you receive an unsolicited offer?
NAVIX CEO recently had the pleasure to be a guest on The Leadership Hacker podcast. If you enjoy podcasts, and want to learn more about preparing yourself and your company for exit, check out Patrick’s interview on your favorite podcast platform.
In one of the Star Wars movie’s pivotal scenes, Darth Vader attempted to lure his son Luke Skywalker to the dark side of the Force, warning “You don’t know the power of the dark side.” Luke’s skill and talent with the Force made vulnerable to the dark side, and thus the target of his nefarious father’s attention.
There is a powerful lesson here for business owners like you. Your skills and talents may come back to haunt you when you ultimately try to exit from your businesses. Within many companies, the owner is the most valuable and vital employee. Your knowledge, relationships, and vision are what drives the business. Undoubtedly you have help—no CEO/owner build a sustainable business by himself or herself. However, for years or even decades, much of your company growth has mostly been due to your personal presence and efforts. Then, one day, you wish to exit. If at that time you remain an essential employee, you may be unable to achieve commonly held exit goals: financial freedom, a sustained business legacy, and an exit on your own terms. You may find yourself in the dark side, trapped inside the company.
