As the owner of your business you may have a clear idea of what you want to do as the ‘final act’ for the company you have created. You may have this clearly articulated in an exit plan.
Your exit may be through the planned transition of the business to a family member or your management team. However if the preferred route is a trade sale the timing may be less predictable as finding a suitable buyer isn’t completely in your control.
Running your business can be all consuming so the thought of it coming to an end and hanging up your boots may be the last thing on your mind. That doesn’t mean an opportunity to exit will not arise. For example you may get an unsolicited approach from someone interested in buying your business. Such an approach can generate many different reactions, you may be flattered or thrown into a tailspin or both.
Whether or not you have an exit plan what do you do about an unexpected approach?
- Decide whether a sale is what you want. For you and the potential acquirer the process of moving from initial enquiry to something meaningful such as heads of agreement will take up time. If you are not considering a sale save yours and the other party’s time by saying so up front. Try to avoid the temptation of playing along to ‘find out what you might get’. It is unprofessional and to a large extent meaningless as what one acquirer will pay may be very different from another.
- Relax. Getting to a deal will take longer than you might think so don’t let an approach become the all-consuming focus of your working (and personal) life. Furthermore if someone has approached you they will be motivated to make the early running – you don’t have to.
- Find out who they are. A few simple enquiries online or through your own network may provide useful insight into whether the approach is worth entertaining or dismissing.
- Advice is invaluable. At this stage you may not wish to engage a team of advisers and start to pay fees, however a bit of guidance from a trusted third party can help clarify your options.
- Keep your focus. Whatever the eventual outcome of the approach the health of your business is important. A healthy business will help secure a better deal if the approach materialises into something serious, and if the approach comes to nothing you don’t want it disrupting the momentum of your business.
Almost all the elements of a good exit plan help you to build a better, more valuable business. This is important if you keep the business as well as helping you optimise the value you get when you do come to sell. It is well worth starting the process of writing the script for your ‘final act’ of your company’s story.
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