A little known, yet uniquely effective, strategy to propel breakout growth for a lot of companies is to just…
…put it up for sale.
Whether or not the company or its owners are truly ready for it.
The reason why starts with that fundamental entrepreneurial dream of building a company successful enough to attract a buyer.
So as to reap a financial harvest and windfall. Sometimes in the millions of dollars, sometimes in the billions of dollars and at all points in between.
This is really a simple and straightforward goal.
But one that so often gets lost in the noise, hustle and bustle of the daily business battle.
This is especially true for closely-held private companies, who have the blessing and curse of not having “quarter-by-quarter” financial accountability as public companies do.
It is a blessing in that this kind of financial reporting and accountability is a lot of work.
And kind of insulting too.
I mean, do we think that seasoned executives – with lifetimes of industry and domain experience – really want to listen to some “whipper snapper” analyst opine upon and question their strategy and approach?
But of course this lack of feedback and accountability can be very much of a curse too.
For starters, because of it way too many private companies just don’t do any kind of financial reporting whatsoever.
And if they do, and if results are disappointing, as opposed to the real time feedback that public companies would get in terms of their stock prices cratering, private company executives instead often get quite skilled at “rationalizing” poor performance on the myriad of usual suspects – economic conditions, overseas competition, employee turnover, product development delays, supply chain snafus, etc.
And as they do, sometimes even unknowingly that beautiful dream of a business exit and financial windfall recedes depressingly into the sunset.
Luckily there is a way to give any business a quick and easy boost.
A boost toward better financial results.
And a boost toward a faster timeline and better probability of a business sale at an exciting price.
To illustrate, let’s investigate two typical company scenarios:
Company Scenario #1: A company lacking great financial traction – slow revenue growth, little profit – but one that competes in an industry attractive to strategic and financial buyers. Many software and healthcare businesses fit this description.
Company Scenario #2: A company with a solid revenue base – say more than $5 million in sales – but competes in an industry not one of great, current interest to buyers / investors. Many distribution, manufacturing, and service businesses fit this description.
Now, in both scenarios the likelihood of a third party buyer approaching these companies and making anything other than “fire sale” offers for them is quite low.
And because the executives running these companies think they know what their companies at their current point of development are worth they…
Sure, they work hard every day but they don’t make meaningful progress toward their most important goal – increasing the value of their business via improving its financial performance and strategic positioning.
Now somewhat counter-intuitively, businesses “stuck” like this can, in very many circumstances, give themselves a quick and easy boost, simply…
….marketing themselves for sale.
To prospective financial buyers. To prospective strategic buyers.
To this wide and wealthy world of ours.
Yes, yes, yes, I know there are concerns of confidentiality and distraction when so doing, but these are far outweighed by the vast benefits of putting ourselves out there, warts and all, for outsiders to evaluate and value.
Putting out there what our actual financial results have been.
Putting out there as to what our financial results will be, and why – in the form of well-documented and reasoned financial forecasts.
And putting out there the “story” behind the numbers – the talent, work ethic, and integrity of our people, the suredness of our IP, the thoughtfulness of our product development roadmap, the sustainable competitive advantage of our operational cost structure, and the like.
Putting all of this out there and SO many good things come back to us.
Ideas. Relationships. Momentum.
All of which come back to us whether or not we actually consummate a business sale.
We will know just like a public company does what we need to do – financially, strategically, culturally – to attain our dreamed of financial harvest.
And we will attract to us new relationships and partners to help us get there.
And oh yes….we just might attract offers for our business at a price exciting to us.
And attain that financial windfall far sooner than we thought possible.
Need Better Execution in Your Business?
Have good ideas but need a burst of better business execution to get them done?
If so, we should talk.
And we’ll reach out with our thoughts to help you.