There is an endless number of lessons you can learn as a small business owner. In fact, each day, there is probably something new that you learn (or could be learning). But there is a second, very important step to all that learning. And it is Implementation. You can read all the business books at the library. Subscribe to 100+ small business blogs. Read every magazine for small business owners you can find. Without implementation though, these ideas stay theoretical. They need to be actually applied to your business. Pay attention to the lessons, but also learn from them and implement them.
Lessons from Selling a Startup
Finding a buyer for your business can be a challenge. It can also be an exciting process. But it is a process filled with risk. This summer, the Harvard Business Review published 5 Lessons I Learned from Selling My Startup by Ben Faw. His lessons,
- Don’t let bankers, lawyers, or other advisors run the show. (Note: As a lawyer, I’m not sure if this should offend me or not…)
- Recognize the limits of non-disclosure agreement.
- Invest in building trust with potential buyers.
- Hire board members carefully.
- Remember that the M&A process is a marathon, not a sprint.
The article provides good context for each of these points. Your advisors have a role to play, advisors. Mr. Faw is clear that it is your decision, in the end, it’s your company.
One important explanation is the importance of personally connecting with potential buyers. Many buyers want to see more than just financials. They want to get to know you and your team. In some cases, the person leading the acquisition could be the only person advocating for the transaction. If that’s the case, they want to believe in your company if they are taking that kind of chance.
Mr. Faw also offered some good questions when considering hiring a board member,
When considering someone for the board, ask yourself: Is the person knowledgeable about the business and industry itself? Do they have insights or relationships that can create value? And most importantly do they have the inclination, passion, and time to use these assets to create value for your company? If the answer is yes to all of these questions, then they are probably worth hiring.
And his final point contains probably the most important advice. Even though you are in the process of selling the business, you need to continue to run the business. If you are able to grow the business, you may even receive a premium price for it.