When we first began considering selling our business, my husband and I had owned our home infusion company for 12 years. It had been a successful endeavor that had reached 40 full-time employees and a slew of part-time field staff. However, as with many entrepreneurs who have lived in and grown a business for that long, we were wearing down and started thinking about how life might be without the day-to-day obligations of running a business.
The discussions about selling between my husband and I usually started around frustration with a payer contract, employee issue or some technology glitch that kept us at the office late into the night. One of us would end up saying, “Why are we still doing this?”
Periodically, we would get calls and emails from business brokers or investment bankers looking to represent us in the sale of our business. While we generally ignored them, one of the brokers caught Richard on one of those frustrating days. Over the course of a few weeks we had spoken to 4 or 5 brokers, and we were more confused than ever. It was mostly one sales pitch after another, and what valuation information they did give us seemed unrealistic.
If we were going to go through the process of marketing our business for sale, we needed to be absolutely certain what our business was worth. While we had done a reasonable job saving over the years, our business was our largest personal asset.
We ended up having Chip Measells do a formal valuation and develop an exit strategy, so we could be certain of the valuation and how we wanted to execute our departure from the business.
When they finished their report, we knew exactly what our company was worth. They provided a detailed list of other companies in the home infusion industry that had been acquired and the statistics beyond each transaction, including who the buyers were. We found this invaluable as we later prepared our company for market.
The exit strategy gave us a clear picture of which buyers would be interested in our business, what they would value most about our business and what areas we needed to improved to maximize the value of the company and to attract the right buyers.
Maybe more importantly, the exit strategy educated us on the process of selling a business. While Richard and I had both been in business for more years than I want to mention, we had never been through the acquisition process. There were some nuances of deal structuring, information sequencing and how best to communicate with buyers that ultimately made a real difference when we went to market and in how the deal got done.
When we did finally go to market, we felt like we had an MBA in selling a business. We had hard data on what our business was worth, we knew which buyers would be interested, how to approach those buyers and exactly how the process would play out.
For someone who is a bit of a planner like myself, it gave me the confidence to take charge of the process.
We had a very successful experience with Chip and the ultimate sale of our business. I don’t think the process would have been as smooth, and likely not as successful, without the services they provided.
There are days I miss the fast pace of running a business, and I certainly miss seeing my employees everyday. However, as Richard and I now regularly travel here and there, we think of our former employees as our grandchildren…we can always stop by for a visit.
February 10, 2015