HOW TO NAVIGATE THE "NEW NORMAL" TO SELL YOUR COMPANY
This week on “In Process: Conversations about Business in the 21st Century,” we reach the final podcast in our series dedicated to the topic of preparing your business for sale.
There's a “new normal” in the marketplace. Too much money, chasing too few deals. We’re also now seeing a fairly dramatic reduction in the number of companies above 100 employees. That shrinkage, if you will, accounts for a lot of the competitiveness. And, the impact on the market? It's driving the capital downstream.
In the final installment of our six-part podcast series, show hosts Evelyn Ashley and John Monahon speak with Doug Tatum, chairman of Newport Board Group, a national partnership of CEOs and senior executives who advise emerging middle-market companies and assist private-equity firms to invest in and grow portfolio companies. Doug is also the author of “No Man’s Land: Where Growing Companies Fail,” a leading text about growth companies that has been translated into several languages and has won four National Best Business book awards.
“If you take the notion that we're in a cheap capital environment―both interest rates and equity―then I think the new normal, or the new financial calculus in the capital markets or private equity, is that it's just cheaper to buy customers than it is to win them through a traditional sales channel, which is more expensive and takes too much time,” said Doug. “If you can't find a platform company of any size to buy or they’ve already been bought, then you end up performing add-ons or what we refer to as bolt-ons. We’ve got research that shows as much as 85 percent of every deal in the United States is now an add-on, if you include private-equity firms buying from each other.”
Companies looking to navigate these uncharted waters need to be aware of today’s requirements and have in place a set of good fundamental principles in order to make a successful sale.
During the course of the podcast, entrepreneurs, business owners and C-level executives will learn about the:
- Concept of fractional C-level officers
- Succession planning process
- Best practices for selecting a successor
- Lessons-learned from the sales process
- Qualities you should look for in a purchaser
Learn more about selling your business in today’s marketplace by streaming the conversation in its entirety in the player below, or download it to your mobile device via iTunes. Don’t miss a single episode, subscribe to our show “In Process Podcast” on iTunes to receive this episode as well as future episodes to your smartphone.