This article was originally published by BCBusiness and created in partnership with Pacific M&A and Business Brokers Ltd.
Establish a winning strategy when your company’s value is high.
At some point, a person who has launched a business will eventually be motivated to sell it, whether the circumstances are voluntary or involuntary. Ideally, an exit plan will have been established that is not only beneficial to that person, but also to management, staff, and the future health of the company.
Yet in Pino Bacinello’s experience, too many small to medium-sized businesses have no such plan. The president and founder of Pacific M&A and Business Brokers Ltd. says, “I can’t tell you how many entrepreneurs have approached me in their advanced stages of desiring to exit their business and seeking help, with their energy and skills having lessened with age, health or skill set limitations and their company’s value having diminished as a result.
“Of course, it’s never too late for Pacific M&A to help, but we prefer to establish an exit strategy early on so that it can be deployed when necessary and optimize the business value.”
Vancouver-based Pacific M&A and Business Brokers is comprised of a team of experienced, certified intermediaries who represent businesses of all sizes and types. They bring buyers and sellers together in a confidential environment to manage negotiations until a deal is agreed upon and closing legalities are finalized, all the while keeping the clients’ interests at the forefront.
Pacific M&A uses a five-stage process to help clients successfully sell their business, starting with an assessment of the most probable selling price (via a valuation report that interprets the market’s real value of the business in the open market).
This is followed by due diligence and preparation that consists of multiple confidential and restricted-exposure marketing documents to address different levels of buyer interest and qualifications. Then comes the actual marketing — local and worldwide, using their local knowledge and global reach through the company’s affiliates and pool of buyers — after which Pacific M&A handles offers.
The final stage is the close, whereby the company employs a checklist of almost 300 steps to ensure that nothing is left to chance, or to the whim of emotions, fears or inappropriate advice that could derail the sale at the last minute.
To take full advantage of Pacific M&A’s services, prospective clients must surmount the innate resistance of most entrepreneurs about the prospect of handing over the reins of power to someone else.
“Then they have to ask themselves some basic questions instead of leaping in to sell,” says Bacinello, who has owned 13 businesses in eight different industries over the span of 45 years. “They first have to assess how their business is doing: is it flat? Or is it growing? Where is it in terms of value? Does it meet one’s expectations? What is the market doing?”
Other key areas the entrepreneur must address include interest rates, profit margins — are they shrinking due to increasing costs — the level of competition and, finally, whether they are in a buyer’s or seller’s market.
“Our real goal at Pacific M&A is to have business owners realize they should never enter a room without knowing the exits. If you accept this and prepare accordingly, you will be able to sell your business at the right time and at the optimum value,” says Bacinello.