Removing Obstacles

Steps to Selling your Business Part 21.

Removing any obstacles that stand between you and the sale of your company is a key job for your M&A Advisors.

Dealing with obstacles is a systematic process for a skilled team:

  • Identify an obstacle
  • Deploy the best strategic response to properly position it
  • Anticipate future obstacles
  • Prepare a potential defense

Obstacles are to be expected and are not a cause for panic. At Stillwater, we face obstacles head-on. 

Great M&A Advisors will calmly approach obstacles with a solution-focused mindset, which will set the right tone for your mental and emotional state.

Here’s one application of this solution-focused mindset – forecasts.

When we send financial information about your company to a prospective buyer, we are confident that we are delivering high-quality, accurate, and valuable data. However, we also know that most times, a room full of executives look at your forecasts and are mentally cutting the numbers in half. It’s the 50% discount no one asked for, an obstacle that needs to be managed before it makes your sale process more complicated. 

The mental “discounting” buyers typically do is a reaction to the idea that everyone must be hiding something. We know businesses aren’t perfect; every business comes with its downsides, and yours probably is not an exception.

But, quality due diligence by your M&A Advisors pays off here. If they have worked hard in the preparatory phase and have worked hard in communicating their discoveries, no surprises are waiting to be found. 

A lot is accomplished by having a deliberate conversation where you can say to the buyer, “Here are the risks, and here’s what you need to know.”

In essence, we have addressed the suspicious voice in the back of the buyer’s mind, saying, “You don’t need to apply the discount. We’ve already done it for you.” It takes some thoughtful work but, bringing that barrier down completely changes the dynamic of selling your business.

Ensuring the pathways are straight and clear must be your preoccupation at this stage of the market outreach phase. The time and energy your M&A Advisors spend on clearing obstacles now is the key to moving things forward.

If you are planning to divest your business or have questions for one of our Advisors, please contact our team today.

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Written by: Douglas Nix