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O P I N I O N
Questions and answers When positioning your firm for a potential sale, you should be prepared to talk about all facets of the organization, not just the C-suite.
A s an M&A consultant, I come into contact with sellers of all varieties. From “Maybe it’s time to start planning our exit” sellers, to “Get me out of here yesterday” sellers. Anyone considering an external ownership transition should be prepared to answer a few questions that come up in every M&A conversation. You only get one chance to have a first conversation with a potential buyer; you would be well-served by spending some time thinking about answers to the questions that are always raised.
Jamie Claire Kiser
1)Why are you considering a sale? This one sounds like a no-brainer, but having an honest answer to this question opens up the dialogue in a way that nothing else does. A candid answer to this question starts the discussion with a tone of trust and cred- ibility that are essential to moving the conversation forward. “Remember that the person on the other end of the phone has already looked up your firm; they know what is on the website.” 2)Tell me about your firm. Sellers need to be pre- pared to “sell” their firm to the party on the other end of the phone. According to IBIS World, there are 143,172 engineering services firms, and 72,346
architecture firms in the U.S. What makes your firm one in a couple-hundred thousand? Be able to ar- ticulate what makes your firm special (i.e. valuable!), and make an impression on the prospective buyer that they will not soon forget. 3)What are your plans after the sale? I try not to “coach” sellers to give specific answers to questions, but this one, specifically, is my exception to the rule. I don’t have a right answer to this, but I can tell you that the wrong answer is that you plan to retire im- mediately after closing. If that is the truth, then be aware that leaving the firm before the ink is dry on the transaction documents will drive down your value considerably. The business you have built up will need you to maintain stability for some period of time before you pass the baton to the buyer. Let- ting the prospective buyer know that you’d like to
See JAMIE CLAIRE KISER, page 12
THE ZWEIG LETTER May 23, 2016, ISSUE 1153
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