How to Prepare Your Business for a BIG Exit
Guest: Andy Harris, Managing Director of STS Capital Partners. STS guides companies through the journey to achieving an extraordinary exit by selling to a strategic buyer.
STS Capital Partners is a Strategic Partner of CEO Coaching International. Learn more.
Overview: When it’s time to sell your company, what are your options? What can you do to ensure you get the best possible exit?
Step one: put the best possible team together. A deal this BIG and this important requires a CFO who’s been down this road before, an investment banker who knows how to get the best possible valuation for your company, and a CEO who is crystal clear on what his/her goals are for the exit.
On today’s show, Andy Harris explains how owners can prepare their company for a sale, present it in the best possible light, and sell it to a strategic buyer who might pay a significant premium over a financial buyer.
Andy Harris on planning ahead for an exit:
“It’s never too early to start thinking about an exit. And even if you think, ‘I’ve got a second generation or a third generation, or I’ve got succession,’ if by design, you’re building your business for an exit, you never know what can happen down the road. And to me, that’s a best practice: lead your business as though you’re trying to maximize the valuation of it. Do the right things for the long-term with long-term strategic planning in place.”
Andy Harris on building the right team to sell your business:
“In an ideal case, you have a CFO that has been through a transaction before, because there’s just so much wisdom and learning and experience that comes through that. And also have a really good advisor, your investment bank and your sell-side advisor, to help coach that CFO and coach the whole leadership team. If the CFO hasn’t been through a process before, they need to really know the numbers, know your financial system, and be very good at responding to the financial due diligence that will occur. Smaller companies may not have a CFO. And in some cases, you can bring in a fractional or a temporary CFO just simply to run the process. So you may have a VP of finance or comptroller that’s running the books and running the business on a day-to-day basis, but you can bring in a CFO to help get you through the process.”
Andy Harris on one BIG mistake to avoid:
“Owners who think that they don’t need an investment banker. They don’t need a sell-side advisor. They can do the deal themselves. You can always take your company to market on your own. What they’re walking away from is this really extraordinary, additional strategic valuation that you can get when you have a professional advising you. And also, what are the other levers that you have, some of the things you might be able to do before you kick the process off to kick value up.”
Growth Financing Options for CEOs that Don’t Sacrifice Equity Chris Hurn, the founder and CEO of Fountainhead Commercial Capital, explains the debt financing options CEOs should explore before they start breaking off chunks of equity that they may regret parting with in the future.
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About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 67.8% during their time as a client, nearly four times the U.S. average and a revenue CAGR of 25.5%, more than twice the U.S. average.