On When to Sell and Educating the CEO
Our friends over at Axial have a great article up today on educating the first time seller CEO on the selling process. While we don’t play the role of the intermediary, we are often intimately involved in the exit planning process and see these scenarios play out again and again. We’ll be engaged by a CEO to value a company, and throughout the process we sense trepedation on their part in terms of the process. In fact, we find that owners often confide more in us as a valuation firm than their intermediary given our arms length distance from a deal.
To that end, Axial offers some great insight and advice into getting the deal done:[blockquote]At this point, a feasibility analysis should be conducted and the company owner brought through the valuation process. An advisor should make every effort to help a company owner understand the reasons his company is valued at X. In order to reach optimal value, an advisor helps a CEO identify the adjustments that need to be made, how long those changes will take and re-evaluates the company twice a year until it reaches the optimal point of value. Only then should an advisor recommend engaging with potential buyers.[/blockquote]
Spot on advice. Our view from here is that working through a process and educating the CEO – both in terms of the market, their place in the valuation spectrum, and the sale process- certainly helps increase surety of close.