When is the best time to sell my printing business...I hear this question constantly. And my answer is two-fold: (1) It’s when you and your family decide that the time is right; and (2) You have fully prepared yourself for what comes next.
Here are a few points to consider with regards to preparation:
Take Control of the Selling Process
You don’t want to be rushed. Nor do you want to be in a position where you have to sell. The market shouldn’t dictate when you choose to sell. The market fluctuates all the time and the process of selling your printing business can take years.
You don’t need a mergers and acquisitions advisor to teach you about the process. But it can be valuable to find an experienced, trustworthy “industry connector” who can discreetly mentor you about what steps you should take to position your business sale.
Invest Time to Prepare
Allow time to thoroughly and objectively assess the current strengths and weaknesses of your business. Then, decide what you really want to do.
- Should you plan to expand your business?
- Enter new markets?
- Prepare to exit the business?
If you want to maximize the selling price of your business before you sell it, you may need to expand your business and/or enter new markets.
Once you decide what you want to do, commit to a customized plan. Then, stay focused and disciplined as you execute your plans.
Get an Objective Valuation of Your Business
As the owner of your business, you will probably over-estimate the value of your business. Seek advice from an independent expert who really understands the industry and will give you an independent assessment. Yes, your CPA and/or friends may share their opinions, but they will probably tell you what they think you want to hear.
It’s important to really know your numbers, including the historic performance and potential growth.
And make sure you have a timeline that is aligned with the necessary financial resources to execute your expansion or exit strategy for preparing your business for sale.
Tour Your Printing Business
Do a walk-through of what your company might look like to a potential buyer.
- Is your facility well-laid out and properly maintained?
- Has your printing and finishing equipment been upgraded?
- How old is your inventory?
- Will some of it have to be dumped as surplus?
- How would you describe your vision and the culture of your organization?
A buyer is going to look at everything and consider the future potential of your business. Would you ‘buy back’ this printing business if you were in the buyer’s shoes?
In some ways, selling your printing business is like selling a house. To get the best offer, you need to do a lot of work to make it look as good as possible to potential buyers.
What Comes After the Sale?
Think about what you are going to do after the sale closes. Will you invest in another business? Play golf? Move to Florida? Give back to the community?
You will be much more comfortable selling your business if you already have a game plan in place for what comes next.
Consider the Transition Process
Will you want to work for the new owner for six months? For a year? Do you have a successor in place in case you have health issues during the transition?
The happiest sellers seem to be those whose post-transaction vision includes the gifts of faith, family, and freedom. You will also feel better about the transition when you make time to help others who may not have been as fortunate as you have been.
Keep It Confidential
You don’t want to people to speculate about reasons your business might be for sale. Non-disclosure agreements (NDAs) or non-circumvent agreements are standard practices when you work with a licensed business broker who can help find potential buyers for your business.
Brokers and potential buyers must also be able to trust you. So, always do the right thing and always keep your promises.
Be Mentally Prepared to Sell
Although it’s natural to feel a bit anxious about the prospects of selling your business, you must be ready to answer all of the buyer’s questions with clarity and confidence. The buyer will be making strategic, rational decisions that have the potential for financial benefits. If they will be merging to companies, they want to be very sure that the two companies have some chemistry and similar cultures.
The process of selling your business can take longer than expected. So, even if you have no immediate plans to sell your company, it can’t hurt to start thinking about everything that’s involved. If you run your business well, maybe an offer to buy your business could materialize unexpectedly.
In any case, there will come a day when you decide to turn over your business to a new owner. If the business is your legacy, it should be something you will be proud to sell.
Take a listen to some additional thoughts on this issue in this episode of my podcast, The Printer's Edge.
Maybe you'd enjoy checking out some of our team's predictions for 2018.