Merger & Acquisition Insights

4 Boxes You Must Check if You Want to Sell Your Business in 2022

Posted on December 20, 2021 by admin

If you are considering a sale in 2022, make sure you have your ducks in a row. If you can check the following four boxes, you will be in good position to sell at your company’s best value and simultaneously experience peace of mind before, during, and after the sale process.

Find Out What It is Worth

The only thing holding you back from selling may be the absence of understanding how the market will likely value your business. Once you fill that information gap, you can begin to take confident steps to beginning a new chapter of life. Additionally, once you begin receiving offers for your business, you will be able to respond quickly and decisively. If a buyer presents you a “dream offer” and you have not done your homework in advance, you might unintentionally submarine a great opportunity.

Determine What You Can Do to Enhance a Future Sale (and Assess if you are Willing to Do It)

If you are not satisfied with how the market will likely value your business, find out what you can do to enhance a future outcome through professional assistance. These are strange times. The path to enhancing a “net” outcome of a future sale beyond what is available today can be tricky given the current constraints on organic growth (limited access to drivers and trucks).  Depending on your current season of life, your appetite for doubling down on your transportation investment may vary greatly. How resolved are you to committing more capital/debt, adjusting lifestyle, dedicating more energy, and assuming more financial and strategic risks? Will those extra commitments be worth it? Could you arrive at a same similar financial place through a deal today in combination with a post transaction investment strategy with less risks and less stress? There are no right or wrong answers here. If you know how to build more value in your business but in your heart you know you have no appetite to execute what is required, say it out loud. Being honest with yourself will remove an unnecessary burden from your shoulders, will bring clarity to your exit strategy goals and will equip your advisors to bring you more value throughout the sale experience.

Begin Developing A Vision for Life After Transportation

Imagine this. You are thirty days from closing an all cash deal. Suddenly, it dawns on you that you have never done anything but transportation, and you have no idea what you will do next. You have a crisis in confidence and consider pulling the plug on a great deal with a wonderful buyer. This is quite common. In Bob Buford’s book, “Half Time,” he discusses the importance of business owners developing a vision for the next chapter of your life and taking steps toward that transition while you still own your business. Whether it is getting involved in charitable work, taking adventures with your grandkids, or diving into a new investment opportunity, the point is to create overlap. This will do two things. It will eliminate the potential crisis in confidence which can be incredibly disruptive. It will also provide an anchor to your “why” for selling. Change is difficult in any context. The stronger your “why”, the better decisions you will make for yourself, for your family and for your employees during the sale process.

Give Yourself Enough Time to Run a Winning Process

Of course, you want to build your transaction team with proven, industry-specialized resources: an M&A advisor, CPA firm, transaction attorney, wealth advisor, etc. However, even with industry-specialized resources surrounding you, many uncontrollable factors can delay or kill a deal. See related whitepaper: Owner Guide: When to Start a Sale Process – The Tenney Group . The key to staying in control of your exit experience is to begin the process early. In doing so, you never get yourself in a position where you are compelled to make unnecessary deal point concessions out of frustration or desperation. You also create much more influence over who will be the next trustee of your company’s legacy.

We completed a deal in Q4 (Central Penn Transportation) that took a total of 125 days. That is not the norm. Owners that consistently have the best outcome and most seamless sale experience give themselves plenty of cushion to select the best home for their employees and to navigate issues no one can control, typically 12-18 months.

 

2022 can be a special year for many business owners who desire to turn a page and start a new adventure. By checking the four boxes above, you will ensure you stay in control of the timing and outcome of your industry exit. For more information about exit strategies in 2022, please contact Davis Looney, Tenney Group Strategic Advisor, at dlooney@thetenneygroup.com.

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