Tony Rice, Partner at Equiteq, shares some advice.
I spoke with the owner of a consulting firm this week who said something that resonated very strongly with me and our work here at Equiteq. He said, “We are not selling our firm, and may never do so, but we run it as if it’s for sale”.
I wish I could have coined that phrase! It’s a mantra I highly recommend for the following three reasons, depending on your strategy for the future:
- Never to sell the firm – It’s great for cash flow, sales and profit growth, and sustainability of growth. By running your company as if it’s for sale, you will always be improving performance, reducing risks in the business and making it a more secure place to work for you and your employees. If you are never planning to sell your firm you may not want to make it an attractive acquisition target, but by default you will make it a more attractive place to work for employees, and for clients to ‘work with’.
- To sell or not to sell – We often meet owners who have not yet crystallized whether a future sale of the business is the chosen direction; exit strategy is not yet, or may never be on the agenda. In our experience things often change. Time moves on, people get tired of 18 hours days, circumstances alter. If you are not convinced that your business will never be for sale, then why risk having an unsellable or low value business if and when your mind changes?
- Planning to sell – It’s never too early to start the process of preparing for a sale. You may have a plan to do it in three or five years’ time, but most quality firms get approached by buyers before that. It may be an opportunity too good to miss and if you delayed the start of turning your business into a more desirable asset, then you are also delaying your value growth and the probability of a successful sale will be reduced.