Acquisition Advisors | The Ultimate Exit
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24 Feb The Ultimate Exit

Most successful business owners are good people. Caring people. I’ve worked with thousands of them.

Jerks tend to implode, eventually. Traits of care, honesty and integrity aid the business owner in surviving and succeeding over the long haul, so most who “make it” are “good folks,” as we say in the South.

Yes, most successful business owners are also driven to achieve material and financial success, but such is not the extent of who they are. They care about the people around them, such as their employees. They contribute to charitable causes.

When the time comes for business owners to sell their businesses, they worry a lot about the impact it will have on their employees. In most cases, I’ve found, the owner’s “ultimate exit” would have many of the following elements:

  • maximum price
  • confidential until closed
  • all employees keep their jobs at same or better terms
  • key manager or manager(s):
    – assist in the sale, keep it confidential, and earn a bonus at closing
    – are hired by the buyer to continue running the business
    – gain or increase their ownership in the business
    – have a “good” experience with the new owners, who are committed to growing the business
  • buyer is “good people” and succeeds in growing the business
  • business continues to operate at its current facility or community
  • seller retains an ownership stake in the ongoing business and such pays off handsomely

The amazing thing is, all off these are achievable for many business owner-sellers. At least, when the business at hand is stable and earning $1 million per year or more in annual profit. The buyers of businesses this size or greater are many, and most want the established management team to remain and continue to run the company.

The biggest barrier to making this happen for a business owner is — aside from finding the right M&A firm that has the knowledge, skill and staff to run the processes and put this type of deal — convincing him or her it IS possible. That he/she can maximize the sale price AND secure these additional elements. The keys to making it happen are:

  • Proper preparation and packaging
  • Run a process that works the top buyer candidates simultaneously
  • Skillfully communicate and negotiate the seller’s deal term desires
  • “Sell” the skill of the management team and its desire to remain
  • Negotiate on behalf of the management team

Buyers want to do business with good people. Buyers who trust the person or persons that they are buying out will pay more. Buyers who see that the selling owner cares about more than just money, such as the employees, view the seller as trustworthy. Of character. And this is why going for more than just money can result in The Ultimate Sale. That is, a maximized sale price PLUS so much more. We also call this a win-win deal. Seller, buyer, employees and the community all win.

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