Be Ready To Sell

That's the word from Richard Bernhardt of the M&A Forum, a company that specializes in connecting buyers and sellers of tech businesses.

Speaking at a panel I had the honor of hosting at Everything Channel's recent XChange '08 conference in Grapevine, Texas, Bernhardt told a packed room of solution providers that megadeals like the sale of CDW have slowed down, but that plenty of smaller businesses are selling regularly. Bernhardt's one caveat: Due diligence time has increased, so deals are now taking five to eight months to close.

So, what are buyers buying? Any solid, profitable solution provider business is sellable, Bernhardt said. But buyers are looking more closely at the product/services balance and choosing companies with a heavier focus on services, especially recurring revenues, he said.

Another panelist, Frank Helstab of the Institute for Corporate Planning and Finance, echoed Bernhadt's words, adding a few words of advice for the novice business seller. Most solution providers will sell a business once or twice in their lifetimes, he said. And they are selling to people who buy businesses several times a year. That's why it is key to know what your business is worth and be prepared to sell from day one, he advised.

Every business owner will receive at least one unsolicited offer for his or her business, Helstab said. Rather than consider the offer in a frenzy, it's best to know your value—and your price—ahead of time.

Bernhardt added that it is essential to keep your eye on the business during a prospective sale. Many owners can get so caught up in the process that the business falters, a warning sign for potential buyers that the business isn't sound without the owner's influence, he added.

Are you considering selling your business? Would you like more information? We here at Everything Channel want to provide you with information that is useful to you and your business and we have the right people and tools to get you started.

If you would be interested in attending a session about selling your business, let me know and I will assure that you get invited to our next one.

When will you sell?