by Scott Bushkie, CBI, M&AMI
When selling your business, one of your biggest hurdles will be that first management presentation or facility tour. This is the first time you’ll meet the buyer face-to-face in a room to talk. This can be as short as 1-2 hours or more often it is a four to six-hour meeting, and it’s intense.
We’ve had sellers knock it out of the park. And we’ve had sellers who thought they nailed it, when we knew the buyers were never coming back. First impressions are critical. Here are a few do’s and don’ts:
Do prepare, well in advance. Organize/clean the shop floor or the office, get rid of old equipment, and file all the papers on your desk. (The piles on your floor too.)
Your advisor should prepare an agenda for both parties to approve ahead of time. Have a presentation packet with detailed financials ready as well as any other pertinent information.
Do highlight your key people. Always credit the team members who helped you get where you are. If you haven’t already, prepare staff bios and a thoughtful commentary on how they fit into your organization.
Don’t claim perfection. That might sound easy, but when asked what they’d do to grow or improve the business, I’ve had sellers answer with an emphatic, “Nothing!” That’s great for you, but it doesn’t give the buyer anywhere to grow. Be humble, you might be doing a great job but there are always ways to improve.
Do be open and transparent. Don’t try to hide any skeletons. When it comes time for due diligence, the buyer will look in every closet. Disclose issues early and build trust.
Do be credible. Many buyers will ask for projections. Work with your advisor and management team to come up with realistic numbers, not inflated dreams.
Don’t play the “I don’t do any marketing” card. As a growth strategy, that’s a weak argument and it won’t mean much to a buyer. The buyer wants to see a roadmap for the future, and “advertise” is not enough.
Do say “I don’t know” if you’re not sure about an answer. Better to provide an answer later, or say you can’t provide something at all (like the aforementioned roadmap or projections) than deliver unrealistic numbers.
Do practice what you’re going to say. Run through some mock interviews with your M&A advisor. When the buyer asks about safety issues, tell them about your exemplary track record these last 10 years. Skip the one about the guy who lost a finger 25 years ago. This is not the time for storytelling. This is time for clear, honest feedback so the buyer can make well-informed decisions.
Do ask questions about the buyer. This isn’t a one-way interview. In today’s environment, you’ll likely have a few buyers to choose from, so ask the appropriate questions to figure out which buyer is right for you, too.
Scott Bushkie is Principal of Cornerstone Business Services, an M&A Advisory firm. He is also the current Chairman of the International Business Brokers Association. To request a book with advice on the exit planning process, or to discuss other confidential options, contact Scott at (920) 436.9890 or [email protected].