Your partner, shareholder or loved one comes up and says, “I think we should consider selling the hosting company.”
Exiting, the polite word, better stated as selling your business should be part of your business plan strategy and analysis. It should be an annual event and part of your discussion with your partners, corporate board meeting or at lunch with your family management associate.
Have an annual meeting or part of a meeting devoted to selling your hosting company. This meeting allows you to move a bit outside that day-to-day box. Many companies keep on trucking toward that distant horizon, not knowing what the horizon is. While you will probably not sell this year, you have opened a host of questions that can drive you and your business to greater success when you do pull the trigger.
Here are some general ideas this will elicit:
- What are our individual goals? You may find out that mister 51% has a completely different goal than mister 49%. These goals may not even be financial.
- Why, when and what (+ other “W” words) would make us sell? Where is your company positioned today, and where should it be positioned for a future sale?
- If someone walked through that door tomorrow and said I want to buy your company, at what price would it be a realistic “no brainer”?
- Should you consider a meeting or discussion with an outside firm to understand the sales process, get a sanity check and value confirmation. Even if your horizon looks fairly distant.
- If your group sees a potential exit in the next 5 years what should you do today? You may consider certain balance sheet items, leases and other items that can enhance your long-term sale.
Now get it over with, broach the subject, and write a bunch of questions on the Blackberry. Have the meeting. Afterwards you can slide your questions and concerns back in the desk until next year.
Now when some one says “I think we should consider selling the hosting company.” You reply, “Oh its that time of year.”
Confessions of a broker: Sellers that make a sudden decision to sell often underperform the market.
Later – Tom
More about Tom Millitzer, President of NCC — E-mail Tom Direct
See Tom at HostingCon present: Dissecting a Hosting Company Acquisition Wednesday, 8-12-2009
