The dream of many B-to-B catalog marketing entrepreneurs is to “cash out” someday. If that’s your dream, start planning at least five years in advance. First compile a list of what it is you think you have to sell. Be realistic, because if you’re not, the only people you’re hurting are yourself and your shareholders.
Your initial list might look something like this:
* solid three-plus year track record of sales and profitability growth;
* solid three-plus year growth in the 12-month buyer file with increasing one-, two- and three-year customer values;
* high, dependable margins;
* unique, hard-to-find products and services;
* a successful track record of new product development and sales;
* a successful track record of dependable customer service innovations; and
* quality, loyal, long-term employees with professional management.
Too Dependent on Founders/Owners
An issue I come across frequently is that many businesses up for sale are still far too dependent upon their founders and/or owners. Clearly this is a problem for any potential buyer who wants to continue to operate the business in the future. Many buyers opt to fold the business into another business they already own. If you see value in being involved with an ongoing operation, address the dependency of the business — whether it be founder(s), owner(s), shareholders or others.
The buyer will rightly see the risk of those individuals departing after they’ve sold their shares. In many cases, the buyer will insist you retain equity for a period of time after the sale to ensure an effective transition of value. To avoid this, try “beefing up” your management team. By having a professional, proven management team in place that can drive the business forward on a daily basis following any sale transaction and the departure of any owner, you’ll greatly increase your sale value.
Something to think about as you’ve probably worked a long time to reach your “payday.”
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fl., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at firstname.lastname@example.org or (954) 383-5221 (direct line).Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221
Comments or questions are welcome.