business plan that has been historically successful and is
positioned to continue being profitable in the future. Have
a clearly focused, executable vision and goal that everyone in
the company understands.
Diversify Your Customer Base
Don't put all your eggs in one basket. If 90 percent of your
revenue comes from one customer, that is a big turn-off for
buyers. Some companies have great revenue numbers, but 90
percent of it is tied up in one contract. Or, a majority of their
sales comes from a single, locally owned business.
Even the most risk-tolerant buyer doesn't want to take the
chance that the company's revenue could disappear overnight.
If more than a third of your profits come from one customer, or
one closely-related group of customers, you need to create and
implement strategies to expand. Diversify your services. Secure
new customers. It will make your company more valuable.
Know Your Personal
and Financial Goals
Out of nowhere, a buyer offers $35 million for your company. That's a huge amount of money, but another company
similar to yours just sold for $43 million, and you got a valua-
www.npnweb.com n NPN Magazine
tion recently that says you're worth $40 million. Making snap
judgments about any offer based on emotion or incomplete
data is not wise or productive.
The real truth is that, until you have a willing buyer in
front of you, the value of your company in the marketplace
is exactly zero. So it can be very useful to sit down with a
wealth management professional to clarify exactly what you
want to accomplish when you sell your company.
You must determine whether it's a yacht, or enough
money to launch your next company, or a trust fund large
enough that your great-grandchildren will be able to go to
the college of their choice. How much money it will take
to achieve those goals? Then, with your goals, motivations
and priorities clear, and with everything else in place, you'll
be in the best position to make a successful and profitable
sale. You will understand "why" you are selling and helps
you realize that the sale is helping you reach an important
goal in your life.
As the Boy Scout motto emphasizes, "Be Prepared,"
even when it comes to selling your company. Being prepared to sell improves the likelihood the transaction will be
completed, reduces stress during due diligence, and
enhances the value of your company.
MAY/June 2013
21
