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Guest: Brenda Jacobsen and Andy Harris, Managing Directors at STS Capital Partners, where they guide entrepreneurs and CEOs through the intricate and often emotional journey of selling their businesses.
Overview: Selling your business may be the single most important financial event of your life. And the process is far more complex, emotional, and impactful than most CEOs realize. CEOs who truly care about the businesses they built need to find more than just the right fit for a sale. They need to work through a strategic process that will maximize the company’s value, protect their teams, and secure their legacies as founders.
On today’s show, Brenda Jacobsen and Andy Harris discuss what it takes to prep your business for a sale, how to balance running the business while navigating the exit process, and the critical decisions that determine whether you just get a deal done or Make BIG Happen for the future of your family and your company.
Andy Harris on preparing for the process of selling:
”A lot of business owners spent their lives building their business. They know their business inside and out. But most have never sold a business before. And so you really don’t know what you don’t know. Brenda had the experience of selling a family business. I was a hired gun CEO for businesses that were backed by three different private equity firms. From the very first day that a private equity firm buys a business, they’re thinking about the exit, which is in three to five to seven years. So you’re working to that and it’s a process from the beginning, let alone the full exit process when you finally decide to go to market. So it’s definitely a process when you’re selling your business and you have to surround yourself with experts, and trust the process and trust the experts. And it’s going to be an emotional rollercoaster, that’s for sure. But there’s light at the end of the tunnel.”
Brenda Jacobsen on running your business to sell your business:
“ I think it’s always going to make a business healthier to build it as if you could sell it. Whether that’s the path you choose or not. A group like ours that’s supporting business owners who are ready to step into a selling process, we need a lot of information upfront. And I think when I was CEO and starting to sell, it was easy to become captivated by the process, because that was a new thing for me at that point. And I could take my eye off the ball of running the business. We want businesses to be sellable without the founder or the business owners to be a critical part of its ongoing success. So hopefully the founders or entrepreneurs have started to take a step back and they can be extracted from the business easily, but someone needs to be keeping their eye on continued performance. A growing business is going to be more attractive than one that might be stabilizing or maybe even dropping off.”
Andy Harris on the team you need to get the deal you want:
“An exit process needs to be well-planned for the process itself, but also for things like estate planning, trust planning, financial planning, getting your house in order. Having a CEO coach involved and then tag teamed with a sell-side advisor just makes such a big difference, first, in significantly increasing the opportunity that the deal will get completed. And then secondly, helping to manage the due diligence, the workflow, the emotional rollercoaster, and just helping get a really great outcome. I think there’s also a lot of business owners where people are knocking on your door every day. And even if it’s the buyer, the one that you just know, ‘They’re the one I want my business to be sold to, they’ve given me a good number, I don’t need an advisor, I can just hire my lawyer to get this deal done.’ There’s many cases where those deals don’t end up happening. They blow up and it’s really good to have that advisor in place. If you do want to run with one buyer or maybe a small handful of buyers, we would run that in terms of saying, ‘We’re going to give you the opportunity to preempt a process. You look like you’re the ideal buyer. We’ll give you some information. You need to come in with an offer. If it’s compelling, our client is willing to go with you, but it has to be compelling. Otherwise, we’re going to run a process.’ The fact that we’ve been hired sends a message to the buyer: ‘The seller’s serious. We really want this business, so let’s give them a compelling offer.’ There’s a little bit of fear of missing out. So we’ve created competitive tension even when it’s just with one buyer. And, if that outcome happens, the buyers got what they want, the sellers got what they want, and we got a really good strategic deal completed for both parties.”
Links:
6 Keys to a BIG Exit – At a recent Make BIG Happen Summit, three of our BIGGEST success stories delivered master classes on the vision, strategy, and commitment that CEOs need to bring their businesses across the finish line
9 Things That Could Derail Your 9-Figure Exit – To maintain excellence through a successful exit, the CEO and supporting team will have to keep pushing the business forward while also steering clear of these common pitfalls.
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, the firm has coached more than 1,500+ CEOs and entrepreneurs across 100+ industries and 60 countries. Its coaches—former CEOs, presidents, and executives—have led businesses ranging from startups to over $10 billion, driving double-digit sales and profit growth, many culminating in eight, nine, or ten-figure exits.
Companies that have worked with CEO Coaching International for two years or more have achieved an average revenue CAGR of 25.9%, nearly 3X the U.S. average, and an average EBITDA CAGR of 39.2%, more than 4X the national benchmark.
Discover how coaching can transform your leadership journey at ceocoachinginternational.com.
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