Selling a business is tough because the majority of business owners in the small to middle market don't get to practice. Fortunately there are plenty of people who have been through it dozens of times and are happy to share their experiences, their triumphs and their failings. The resources below cover the importance of doing your own due diligence early on, the competitive environment that's formed around buying up middle-market businesses and what causes deals to go bad. Transitioning a business is far more than a numbers game and with so many moving parts, it's important to know how much and why each part matters.
This post from Forbes zeroes in on the due diligence phase of selling a business. By looking at the process from the buyer's perspective, contributor Steve Parrish highlights what a seller can do to make the process smoother and more likely to lead to a successful transition. He specifically advocates for doing some of your own diligence before stepping into the sales process.
This short post from Pitchbook examines the increasingly common question of where the market is headed. Instead of providing the answer, it provides an overview of what's been going on and why, specifically addressing the increased competition over businesses in the middle market.
This six-minute video from Equicapita touches on the importance of setting up processes that make your business attractive to a buyer. It touches on documentation and the transfer of knowledge that comes with regular accounting and reporting systems as well as the state of personal expenditures and annual financial reporting. This is part of a series of short videos you can access on Equicapita's Youtube channel.
In this hour-long episode of the M&A Science podcast, Synap CEO Jeremie Bacon sits down to talk through buying and selling businesses, focusing especially on strategic deals. He notes that such a deal is much more than a numbers game and considers the importance of both sides focusing as much on what they have to give as what they stand to get. Drawing on his personal experience on both the buy and sell sides, Jeremie uses true stories to illustrate what can help, hinder or kill a deal, whether you're the buyer or the seller.
After two minutes of small talk, this hour-long episode of the Private Equity Funcast launches into an in-depth discussion on due diligence with Jay Bartlett and Scott Orleck from Parthenon-EY Ernst & Young LLP. They discuss market sizing, growth rates, cyclicality and competition, and break down into three main categories the reasons deals go bad: market, company and fit.
What's your transition plan?