Identify Team Skills Needed for the Deal
Most owners of Middle Market businesses are too busy running their business to personally devote the time required to manage a sale of their company. Usually a senior executive (e.g., the CFO, COO, CMO) is tasked with leading & coordinating the activities in conjunction with a team that is overseen by the owner or CEO.
You might consider creating a grid outlining the various players on your team and their respective assignments as pictured in the illustration below (SellPQ provides a template worksheet and guided interview to complete this step):
You will want to conduct a similar exercise once you enter into discussions with prospective buyers, to clearly identify and understand the role and responsibilities of the buyer’s team.
The steps involved include:
- Prioritizing the overall objective(s) delineated in Step 1
- Setting tasks and a targeted timeline for the sale
- Allocating company staff to specific tasks to ensure all needs will be addressed. Remember, nearly 80% of Middle Market companies complete a sale transaction without using outsiders – so it can be done.
- Determining at which stages “outside” assistance will be engaged, e.g.:
- Accountants to provide audited statements, financial projections or tax returns
- Tax advisors to determine outcomes with alternative deal structures
- Wealth managers to provide advice on what owners should do with company sale proceeds to meet their personal financial objectives
- Management consultants to improve company profitability or reduce costs prior to contacting buyers
- Bankers to help structure your deal or provide debt financing for buyers
- M&A firms for assistance identifying buyers beyond those “strategic buyers” such as your competitors, suppliers, distributors, etc. Usually a strategic buyer will pay a higher price for your company than a pure “financial buyer” such as a family office or private equity firm
- Valuation services even though SellPQ offers multiple methodologies for getting a market-based value for your company, under special circumstances you may decide you want a certified valuation (e.g., IRS section 409A valuations) before you make contact with potential buyers
- Conducting internal due diligence to make sure all needed financial, managerial, operational, competitive, legal, intellectual property and other substantive material of interest to a potential buyer is available.
PQ can refer you to third-party advisors for Step 2 including Buyer Prospecting Tools, Wealth Managers, Tax Consultants, Lawyers, Accountants and more.
Contact Us at any time for help or to provide feedback.
