FOR BUSINESS OWNERS
Four ways this can go, and waiting is one of them.
Most owners arrive with a question rather than a decision: what the business is worth, whether this is the year, and what changes if you sell part of it instead of all of it. This page sets out the options and where each one leads. If the honest answer is that you are two years early, you will hear that, and it is a real answer rather than a polite way to end the call.
WHAT OWNERS ASK FIRST
Four questions, before any process starts.
None of these commit you to anything, and none of them need a banker on retainer to answer.
What is the business worth
Not a multiple from a trade publication. What a buyer would pay for this business, and which parts of it they would discount on the way to that number.
We are twelve to twenty-four months out
You are not selling this year. The work that pays now is fixing what a buyer would otherwise argue the price down over, while there is still time to fix it.
Someone called about buying my company
One interested party sets no market. What that call is worth depends on whether anyone else is looking, and that gets arranged before you answer it.
Will my employees find out
Who is told, in what order, and at what stage is a process design decision. It gets made at the start and written down, rather than discovered halfway through.
WHERE THIS GOES
Three routes out, and the option of standing still.
For an owner ready to exit
A full sale, or a majority recapitalization
A sale of the whole company, or of a controlling stake with the owner staying in for the next phase. The mechanics are close to identical. What differs is how much of the money arrives at close and how much rides on what happens after it.
- A buyer list built for this business rather than pulled from a database
- The headline price and the deal are different numbers, and the difference gets explained before you sign
- A written checkpoint at each stage, so you always know what happens next
For an owner who wants to keep control
Growth capital, or debt
Capital raised against the business instead of a sale of it: senior debt, unitranche, or a minority equity stake, structured so control stays where you want it and the reporting obligation is one the company can meet.
- Minority equity with governance terms negotiated rather than accepted
- Debt priced against what the business can service, not against a growth case
- Structured so a later sale is not made harder by the money you take now
For an owner preparing rather than selling
Exit readiness, twelve to twenty-four months out
A buyer reads the financials with an accountant and the systems with a specialist. The technology, data, and security side is the part most owners have never had examined, and it is where the discounts get argued.
- The buyer's own technology diligence run against your business first
- Findings ranked by what each one is likely to cost you at the table
- No obligation to run a process at the end of it
Which one fits depends on what you want to keep: the company, the control, or the capital. An owner who intends to run the business for another five years is not a sell-side client, and the first conversation should say so rather than start a process anyway.
IF THE ANSWER IS NOT YET
Waiting is a decision. Take it deliberately.
An owner who is not ready should not be in a process, and a firm that tells you otherwise is selling you one. What is worth doing now is knowing what would move the number and how long that takes. Each of these runs in about ten minutes and produces a written result you keep, with no call attached.
HONEST ANSWERS
What owners ask on the first call.
- What is my business worth?
- It depends on what a buyer would do with it and what they would discount on the way there. Anyone who answers with a multiple before reading the financials is guessing, and the guess is usually flattering.
- Someone has approached us. Should we take the call?
- Take the call and say nothing about price. Then decide whether to run a process, because a single interested party has no competition to price against and knows it.
- Will my employees find out?
- Not from us. Who is told, in what order, and at what stage gets decided before anything goes out, and the buyer list is built with that decision in mind.
- What should I fix first if I am a year or two out?
- Usually the things a buyer can verify without asking you: customer concentration, the quality of the financial reporting, and whatever in the systems and security posture would need a caveat. Which of those matters most depends on the business, and it is the first thing a readiness read answers.
- We may not sell at all. Is a conversation still useful?
- Yes. Ending at not yet is a normal outcome here. Knowing what would change the answer, and how long that takes, is worth more than a decision made against somebody else's deadline.
Start a conversation
Tell us what you are weighing, including doing nothing.
A few lines on the business, what you want to happen next, and the timeline you have in mind. You get a straight answer on whether a process makes sense now, later, or at all.
Bass Zanjani leads M&A Advisory and reads every brief. If the answer is that you should wait, that is what you will hear.