Do you know when is the most convenient time to sell a company?
The best time can depend on different factors, which can be of internal, external, positive or negative nature.
Throughout the life of a company, several drivers may exist that help to analyze a 100 % sale, consider a potential merger or acquisition, sell a non-strategic business, or the divestiture made by any of its partners.
Several actual reasons or motives may drive this decision. What is important is that the clients trust and believe in the services or products offered by the company, as these are the elements that help us to build the brand value, reputation, and positioning.
Furthermore, I consider that a company must be created since its inception with the idea and insight that it will be sold, because a decision of this type helps to create, from the date operations start, a well-structured company, legally incorporated, with its trademark(s), with the capacity of generating sustainable financial information, in accordance with the generally accepted accounting principles (GAAP), with financial planning, and with forecasts that disclose the organic growth it has had. In short, a company that can comply at different times with the requirements of financial, legal, and operating information for a valuation process and undergo a potential review known as due diligence.
A company sale must always be a family or institutional decision, and it is essential to have the advice of a team of specialists in mergers and acquisitions. Businessmen are expert in their businesses, but not necessarily in the sale of their own company. Most of them who decide to go ahead without any advice perform erroneous transactions that may result in future lawsuits or losses.
To sum it up, the best time is always when a company is appealing for investors. What would happen if from the very beginning we create a company that draws the attention of the biggest players, with longer history, greater presence and better positioning in the industry? Would they turn and look at us?
Further on, we will discuss some of the topics that generate value to companies…