Are you ready to sell tomorrow?

I often say that companies are most often bought rather than being sold.

What do I mean by that?  

It is good business practice to review strategic growth options and specifically which additional markets or products/services or capabilities are required to drive growth. 

Many companies do this across the globe and once decided on the requirements there are three strategic choices: 

To develop the territory/product/service/capability internally and grow organically;

To develop it by some form of partnership;

Or develop it through merging or acquiring. Whilst generally the most expensive option, M&A compresses time which allows companies to grow much quicker.

One thing we cannot predict is which company around the globe is having these discussions in a board room and then once decided that they will grow through acquisition, who is on the target list but I do think we have to prepare for it to maximise chances of a successful exit and shareholder value.

This is why I say companies are bought rather than sold, as all potential acquirers will need to have done the work above to then decide to part with funds to acquire a business well ahead of a company deciding to put itself up for sale.

Linked to this, one of my personal leadership philosophies is I believe we need to run our companies in such a way that you are ready to sell tomorrow.  

This is for two fundamental reasons – 

Firstly, it is nothing to do with selling the company.  It is based on running an organised and shipshape operation where the company and its team is supported in a filing system in Notion, Google drive, SharePoint etc. where all documents and information is in an organised fashion.  

This includes a number of items – 

• A contract tracker for all company documents so that we know what contracts the company has entered, the terms and the key expiry so that contracts either don’t auto-renew or lapse.

• All People and Talent Docs

• All governance items such as board packs, share register, tax docs, insurance docs

• Customer sales cube

• IP and Product Information

• Quality Manual, SOP’s and Health and Safety docs

Whilst this takes discipline to introduce and maintain, I think it does ultimately save time operationally as there is a place for everything.  

This isn’t about courting buyers for your business it’s about disciplined stewardship and building resilience in the organisation to operate without you.

In part 2 I will share my more detailed thoughts on the second reason around things we can be doing and decisions we can make in order to be ready to successfully sell tomorrow and drive yours and your overall shareholder value.

Would be interested in any experiences you have going through a sale process and sharing any challenges you have experienced?