Triple Play is a weekly NJBIZ feature that asks top executives in New Jersey to talk about three things related to their industry.
Alan Scharfstein is president of The DAK Group, a mergers and acquisitions advisory firm to middle-market business owners.
Alan recently published a business owners’ guide titled “The 12 Critical Steps to Prepare Your Business for Sale.” Here are his Top 3 tips for owners considering selling their business.
Be prepared: Half of all deals today are unplanned, the result of approaches by strategic buyers or private equity firms. It is important to have your business ‘ready’ for the sale process so as not to miss out on profitable opportunities. This means preparing well in advance of when you are planning to put it on the market. If you wait, your greatest opportunity to build value may be lost.
Future vision: Buyers of your business are interested in its potential — they buy the future, not the past. You must be able to paint a compelling and defensible picture of your company’s path forward that will propel its growth.
Strategic value and positioning: The true value of your company may not be a multiple of revenue or earnings (although they are helpful in establishing benchmarks). The true value can also be based on how a buyer may leverage the platform that you have built. Understanding the underlying reason a buyer is interested in your company, and how much he is willing to pay for that platform, will help ensure you get the most value for your company.