The perfect time for a company sale. Does it exist?
The perfect time to sell or buy a company did not exist before, during and will not exist after the crisis. At the very least, it can rarely be made dependent only on external factors and a generalised view of the market. So the old saying of the lawyers applies: ‘It depends’.
That’s why, in my view, there are two relevant factors that make your company interesting for a buyer:
Basics webinar presented by Nils Koerber
Company sale (M&A) without risk and loss of value
1. the business model of a company
It has to work demonstrably and thus create trust. You and only you can influence this by making the development of the business model a permanent matter for the boss. How do you create what benefit for whom? This question sounds trivial at first. But if you go deeper ? e.g. with the Business Canvas Model by Alexander Osterwalder, you become aware of questions that you have only ever answered intuitively or not at all.
Many people don’t even know that your company has a business model. It’s just always been that way. Our clients always feel this when we are interviewed for a company exposé and work out precisely these elements.
The valuation of a business model can be seen as an alternative or supplement to the classic monetary company valuation. It creates trust, which in reality is the only currency with which you can score points with an investor. There are good ways to put such a business model to the test. Digital, simple and fast.
If it still has significant deficits, you know what you still have to work on before a sale. Take the time. With or without Corona!
In doing so, you will not be able to avoid the question of HOW you bring the added value of your products and services to the man (woman). And that brings us to the topic of digitalisation. Even though everyone is talking about digitalisation, it is far from being integrated into the DNA of many small and micro businesses. Believe me, we know what the level of digitalisation is like in the German SME sector. We experience a lot of it on a daily basis.
2. the fit with the investor
But the worm must taste good to the fish from another perspective.
Your company must fit the investor’s growth strategy without having to force it to fit. Be it that it strengthens existing businesses, adds to what is missing, expands regions and/or sectors. Be it that it brings technologies, methods or processes that you want to build up.
Or it could be that the company lacks knowledge, experience and expertise in the form of employees. The priority is always to be able to integrate the company to be bought strategically (and also culturally) cleanly and as smoothly as possible without creating further problems.
Therefore, if a clear strategic fit is not discernible for the investor, he usually leaves the offered acquisition alone. No matter how good the business model is or how cheap the company may be.
However, you cannot really influence this aspect. The right fit to a buyer usually only crystallises during the buyer search.
And that brings us to an important point. Because in my estimation, in the next few months, maybe even 1-2 years, there will simply be fewer prospective buyers responding to requests to sell and vice versa. However, you don’t need 30 ? 50 or 80 interested parties. What you need is the one with the perfect fit.
That’s what matters!
Image: Fotolia.com
TIPS for further reading:
Corona, Company Sale & Now Part 1
Selling construction companies - is it worth it in the construction boom?
Selling a company in the IT industry
Is business succession an opportunity for founders?
The cooperative model - when employees follow in the footsteps of the company founders!
