Musings on business value, sale preparation, sale negotiations, sale structure.

Posts Tagged ‘CSuite’

Your C Suite

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Remember the days when the guys who ran your business were “the directors”? That later changed to “the executive”.

More recently it is the collection of chiefs. The chief executive officer, the chief financial officer, the chief operations officer. Then we all got to grips with the acronyms associated with them: CEO, CFO, COO, and CTO.

So where the directors sat on the board, the chiefs now all sit in the “C-Suite”. And these are the guys who count when you want to sell your business.

Here is why…

If your business has significant value, then you are unlikely to sell your business to an individual. That means that the new owner of your business will be an industry player.

On the horizontal, it will be a competitor or a complementary business which will acquire your business as “a bolt on”. On the vertical, it will be by way of selling your business to a supplier or a customer.

The horizontal buyer gains markets and products. The vertical gains margin for the acquirer.

When you play with your nest egg at this level, you are up against people who do this a lot more than you do. So you may have a CEO, CFO, and a COO on your side. The guys on the other side of the table will have the same TLAs (three letter acronyms) and a few others besides.

Special chief

The big suitor often has a dedicated officer to deal with you. This will be a specialist in finding and negotiating deals.


You can have your own specialist preparing you if you join our CSuite programme.


 

Their CFO might be given the job. Except that those people are often so engrossed in the day to day numbers. They worry about the way in which an acquisition would affect the ratios. The CFO is often one of the people who are more valuable adjudicating the recommendation. The CEO is also trying to run a business.

The C-Suite has to run the business. They owe that duty to the shareholders. It often appoints a non-executive director or a significant shareholder to negotiate acquisitions.

You will do this very few times in your life. Your opposite number is already prepared. He (she) is up to date on what is what in the acquisition industry. You are about to change your entire life. That is real. Right there.


Let someone who is up to date get you up to speed by joining our CSuite programme.


Their acquisition officer’s job is to get something valuable for as little as possible and on the best terms possible (for the buyer). The acquisition officer gets to look at lots of possible acquisitions. He can afford to walk away. Nobody ever got fired for not making an acquisition. (OK, there was that one time.)

Who has the stronger hand here?

When you start to push the pace in these negotiations, you weaken your position.
When you are not prepared before the discussions, you weaken your position.
When your pitch obfuscates or is unclear in standard presentation standards, you weaken your position.
When you wait until the imperative to sell is immediate, your position is very weak.

You will lose when your position is weak. By “lose” I mean you will leave a significant amount of money on the table. It won’t even be your table anymore.

Get yourself prepared. Get your business prepared. This does not mean putting your business on the market. It means getting your house in order. It means identifying weaknesses in your business and mitigating them. It means identifying and presenting the stuff that really matters to buyers of businesses.

It means you should join a programme like CSuite.

It is a bite size chunk, programmed, easy bits and pieces plan to make a huge difference to your life.