June 8, 2021 //
Steps to Selling your Business Part 16.
Previously, we introduced the task of developing and personalizing an initial list of potential buyers for your company. It’s not easy to do this well, and doing so is a mark of a great M&A Advisory team at work.
You’re now in the Market Outreach phase, and it’s time to show the market what you’ve got.
We know that every company on the list we’ve generated has good reason to be interested in your business; however, our first contact with the company will make all the difference in how (or if) the relationship progresses.
For each company there are three primary questions we address as we proceed:
1. Whom do we speak to?
2. How do we interact with them?
3. What do we tell them?
This question is about the little details. For example, making sure our target list has up-to-date contact names so that we’re not addressing correspondence to someone who was fired four months ago (deals have been lost over less). But, it’s also about higher-level strategy.
For example, many mid-sized companies tend to have a very bifurcated corporate dynamic with a lot of energy divided between the President and the CEO. In this case, we contact the person whose focus is on the larger mission and vision of the company. In this example, it is the CEO, but that’s by no means a given.
Every company has a unique structure; we sleuth out the people with the most receptive ears, combined with the power to do something about what they hear. This is why we don’t often make Chief Financial Officers (CFOs) the first contact at a prospective buyer’s company. A good CFO is paid to say ‘no’ to spending until convinced otherwise. It is a noble role to play, but it’s definitely not the person to talk to first about purchasing your business.
Family-owned businesses require equally artful handling at this step. Do we speak to the Matriarch first? Are the next generation of adult children looking to bring the company into the future? Is there conflict within the family?
When Stillwater was founded, the answer to this question was—by letter, sent through the mail. Some of our team members have clear (if not fond) memories of working their way through piles of envelopes 500 deep, addressing each one by hand.
Although our communications are mainly digital now, some of the principles, we learned with those envelopes still stand.
When your focus is numbers, it can be easy to neglect the human element in a transaction. We place a high value on taking care of the human part in every aspect of life; it is woven into all our practices at Stillwater. Even in a sale process, reaching out as one human being to another starts things out on a relational level, and that’s where we do our best work.
There’s a practical, technical side to the question of How, as well. Spam filters need to be avoided, changing international communication regulations must be monitored and followed, and every word has to be engineered to make an immediate impact. We reach out to busy people who live in a cloud of constant requests for their attention. It’s no small feat to be heard. Our team is devoted to this, and we have substantial response numbers that prove it is worth our effort.
We’ve reached out to the right decision-maker at the potential buyer’s company and managed to get their attention—now what do we say? This is a step in the process where the art of what we do comes into play again. Because we’ve been diligent in working with you through the Preparatory Phase, by the time we reach out to the market, we know your company as well as you do. Sometimes when we show your business to a company, they already know what they’re looking for, and we also know the exact angle to lead with when we tell them your story.
That’s when our communication and analysis skills are even more critical. We become part sage, part advisor, and part match-maker; sometimes, we show opportunities to both parties that might otherwise have been missed.
This stage of the process is exciting, too. Only you understand absolutely everything it took for you to build your company into what it is. But, finally getting to see the market respond to what you have created can be immensely rewarding.
If you are planning to divest your business, or have questions for one of our Advisors, please contact our team today.