Selling a business can be a complex and daunting process. The key to a successful exit lies in implementing best practices that have been proven effective by industry experts. In this article, we'll outline some valuable insights from Jeff Wald, Co-founder of Bento Engine, on how to maximize the potential of a business during the exit process, engage investors effectively, and conduct confirmatory due diligence. By following these guidelines, entrepreneurs and business owners can be better prepared to navigate the challenges of selling a business.
“Keep your team shielded during confirmatory diligence. You still have a business to run and there's always a probability that the deal wouldn't happen.” - Jeff Wald
To keep a business attractive to potential buyers, keep customers a top priority. If customers are happy and well-served, corporate finance will naturally follow, making the business more appealing to buyers.
Regular communication with heads of corporate development is necessary for gathering essential information about the market. Maintaining tabs on competitors, industry trends, and funding activities not only helps entrepreneurs prepare for a potential sale but also keeps them informed about the latest developments in their industry.
Do not be afraid to ask investors for help. They can add value and provide assistance in various areas, such as making introductions and offering strategic advice.
When choosing investors, avoid those who are either too hands-off or overly involved. The ideal investors are those who offer a balanced approach, providing support when needed and checking in periodically.
During board meetings, always include a presentation slide outlining the challenges the company is facing. Send the presentation to board members a few days in advance and allocate time during the meeting to address their questions and concerns. Use the remaining time to discuss the challenges and seek their advice.
Entrepreneurs need to advocate for their company during the due diligence process. Demonstrating knowledge and passion for the company to potential buyers is essential.
Furthermore, always assume that the deal may not happen. Take steps to protect the team and ensure the business can continue operating smoothly. Being prepared for the possibility of the deal falling through allows business owners to move forward confidently, regardless of the outcome.