By Bryan Livingston
Executive Vice President and Principal
For business owners or major investors, the time to start thinking about selling a company should be long before the day that you take the company to market. If maximizing the value of the business is important, and it usually is, then the time to start thinking about a sale is probably two or three years prior to closing. For mid-sized businesses, this will be time well spent.
In an article I wrote recently for Oil & Gas Financial Journal, I discuss several steps businesses owners should take in preparation for a major shift in the ownership of the company. If these steps are followed, the value of the business to potential acquirers will be much greater and, in our experience, the owners much happier after the sale.
The article is titled, “Effectively maximizing the value of a business begins long before the sale process kicks off.” Much of the article is based on what we have seen over the years as we have assisted the owners of service companies in the energy industry. We’ve advised companies that provide a wide variety of services, including pipeline and facilities construction, oilfield distribution and logistics, water management, drilling, downhole specialties, and a broad range of hydraulic fracturing process services. The same considerations have been useful for the owners of electrical engineering and contracting companies that we have served.
The exit planning recommendations we make to our clients frequently take months or years to execute, but in many cases, revenues and earnings have increased dramatically while they were following our advice. It is never too early to begin thinking about a transaction, and to begin making decisions with a focus on building the value of the company to a potential acquirer or investor.
To read the entire article, just follow this link.