The First Steps of Preparing Your Business For a Sale
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Russ: This is the PKF Texas Entrepreneur’s Playbook. I’m Russ Capper, this week’s guest host, and I’m here with Matt Goldston, an Entrepreneurial Advisory Services Director and one of the faces of PKF Texas’s Transaction Advisory Services team. Matt, welcome to The Playbook.
Matt: Thank you, Russ.
Russ: You bet. Tell us how a seller should prepare to sell their company.
Matt: Certainly. In a couple of different ways. One would be mentally prepare. The sales process is very difficult, and mitigating and dealing with concerns and issues that might turn out in the process – it’s good to look at those things early on.
Russ: I’ve been involved in this space a little bit, and that’s great advice right there. I’ve probably been in instances where I wasn’t mentally prepared, but what else? Keep going.
Matt: Knowing value going into a process is key. Having a realistic idea of what your business is worth is of great value.
Russ: And that’s not an exact science either, is it?
Matt: You’re correct. It is not an exact science. Oftentimes a seller will inflate their value beyond what is reasonable for a reasonable buyer.
Russ: Ok. Is it a good idea to go in there, kind of, with a value range, maybe?
Matt: It is. It’s a great idea. It’s a great idea to have a value and know the range, know how you can achieve the high band of the range and engaging a firm that can help you do that could be key.
Russ: What happens if a buyer gives you a value much higher than your range? Do you just celebrate?
Matt: You do celebrate. And that’s the point of our discussion. Being prepared and ready for that opportunity.
Russ: Great, ok. Keep going. What next?
Matt: Planning ahead, knowing your value, having your team that’s ready so that the business is sustainable beyond your involvement are all keys. Being able to speak to the growth of the company and the sustainability of that growth. I often say it’s not the fajitas that you sell, but it’s the sizzle on the platter is what will help a deal close. Speaking to growth – it definitely does that.
Russ: Ok. I’m just real interested with your position. I mean, I would be—if I were in your job and somebody called and said, “Help me,” I’d start getting excited right away, because, man, that’s a highlight of a business person’s life.
Matt: It’s very exciting. Part of joining PKF was to join in that excitement on a daily basis. Different companies, different clients, all with the desire to transact. It’s such a great blessing to be able to help them.
Russ: Great. I want to talk to you more maybe in a future episode, is that ok?
Matt: That would be wonderful.
Russ: All right. Thanks a lot, I appreciate it.
Matt: Thank you, Russ.
Russ: You bet. For more information about this topic, visit PKFTexas.com/TransactionAdvisoryServices. This has been another Thought Leader Production brought to you by PKF Texas – The Entrepreneur’s Playbook. Tune in next week for another chapter.