It is a myth that ostrich stick their heads in the sand when they sense adversity. The truth is that they use their long necks and very large eyes to spot predators early, and then either lay down to hide (if they’ve not been spotted yet), or run away at speeds of over 45 mph. Like the ostrich, marketers need to look far ahead to see an approaching exit and craft a position to deliver the best outcome.
The truth is most businesses will not be run by their current owners at some point in the future. I’ve worked with five businesses in the last ten years that have been bought, sold or recapitalized. Marketers can either be proactive in helping determine the time and circumstances, or leave it to chance, often with less than desirable results for their company and them personally.
As a marketer, your daily goal is to craft a story and delivery mechanism that stands apart from the crowd. However, you also have to tell the story of a business brimming with profit and growth. This is essential for an ideal exit scenario, one that draws several great buyers bidding against each other as they vie for the chance to write your company a big check.
So what to do? First, work with your management team to determine if the company is ready to be sold. Finance runs a business, so make sure the numbers are in order. Preparing a business for sale is all about telling a compelling story that will hold up through due diligence. Remember that any buyer is considering other alternatives regarding how they invest their cash. Buyers may acquire your competitor if they have a stronger business, better customers or standout products or services. There are five key components to a compelling story, and the high price that compelling stories bring:
- Good Growth Prospects
- What does the market look like 3 years from now? How does your business fit into the buyer’s strategy in the space to support profitable growth?
- Unique Products or Services with Operational Strengths
- Are you unique in your space? Are there competitors that are more attactive to your buyers? Operationally, why is the way you do it better than how they do it?
- Proven Trends & Profitability
- Position current, future and trailing financials appropriately.
- Good Management Team and High Employee Retention
- Does your executive team have a track record of success? Are they experts in the space? Why did your best people choose to work with you and not a competitor?
- Repeat Customers and/or Recurring Revenue
- Can the buyer count on having your best customers staying? Will their value compound over time like a good annuity? Why will they stay with you and not jump to a competitor?
Sit down and write a paragraph for each of the five points that you feel would prove your case. If you can’t honestly do that, both you and your management team have some work to do.
RT @TopsyRT: Marketing's Role In Preparing A Business For Sale # http://t.co/Uk5Dbda