Times of Crisis – Selling your business?

In troubled times, you may realize that some vital decisions in your business make 24-hour work – a living hell. Well, before you think solving that hell, here is some recommendations I would like to share from past experience.

  • Rethink your reasons for exit. If you have any VC or BA pushing for an exit, ask them to reconsider, and ask them to come back with a redefined reason.
  • IF any capital investors wish to exit, consider making a management buy-in or employee introduction.

If decision goes to selling, consider:

  • Make proof that your employees have good conditions
  • Make proof that your employees have a stable job situation for at least 12 months.
  • Do a reverse due dilligence, you may be astonned around the factors and insights you will get
  • Ask for an acquisition plan,
  • Ask for a merger plan,
  • Reviewthese. Closely!
  • Ask for cash, if given shared, again – ask for cash. You can always buy shares at will.
  • Earn-out: of cause, but put constraints on the buyers, and make a bonus-compensation for your employees.
  • Implement a business-as-usual clause for early break of acquisition within 4-6 months. If something isn’t working – BREAK THE acquisition or ensure that you get 60-80% in hand, and your employees get 12 months’ salary – flat.

Also consider if a merge is better than an acquisition. There is a lot of feelings involved, but mostly these are associated with dumb brands, logos and stamps on invoice paper. Make a third brand and merge both companies into this, to solve any disruption around moving-forward brands.

Last, but not least, ask yourself again: Do I need to sell? Or maybe ask your employees if there are ready to involve in the lead and make up for any reasons for selling. If it’s a generational shift, employees are likely to buy.

2 thoughts on “Times of Crisis – Selling your business?

  1. Pingback: IT Acquisitions – Determine Your Reason « rasmus foged blog

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