Preparing your business to get acquired by another is one of the most financially lucrative and exciting aspects of business life. Below Mark Sweeny, serial tech entrepreneur, and founder of Certus Solutions, which was acquired by Accenture in 2018, has some tips for Business Advice readers on how to get your business in the best shape for acquisition.
1. Build value into the business
To sell a business, you’ve got to build value first in the business. You might want to sell it, but if the business doesn’t have value in it, no one’s going to buy it. So the first thing is to build value and that doesn’t happen overnight. This isn’t like flipping a house, this is about five, seven, maybe 10 years of hard work day in, day out. You’ve got to make the business easy to buy. These are things like being really good at contract management, knowing your supply chain, and having cyber security accreditations. You also need to build the infrastructure that allows you to deliver the value proposition that creates the value in the business, and again, you can’t do it overnight. It’s about rigour and discipline, knowing your sales process, having your processes documented, all of these things add value.
2. Understand packaging vs selling
When you’re going to sell, there’s a whole different thing. With Certus, I didn’t sell it. I had a specialist sell it for me. It’s a skill selling a company. I can make it look the right way and have it packaged and ready to be sold. But I’m not the best person to sell it. So I got a specialist to do it. If I were to sell one of the other companies, which I’m not intending to, I would still get specialists in to do it. Because I think there is always a degree of emotion you’ve got to take out of it and there isn’t really much room for emotion in business. People that know how to sell businesses also know how to take that packaging to the next stage forward and they also know how to create demand and competitive tension in the marketplace.
3. Remember that cash is king
At the end of the day, if the fundamentals aren’t right, revenue, profitability and cash flow, then you won’t be in a good position. My greatest piece of advice is that cash is king. It doesn’t matter if you’re a one million pound business, a 10 million pound business or a hundred million pound business. If you haven’t got good cash flow, you will go under. So cash is everything.
Preparing your business to get acquired by another is one of the most financially lucrative and exciting aspects of business life. Below Mark Sweeny, serial tech entrepreneur, and founder of Certus Solutions, which was acquired by Accenture in 2018, has some tips for Business Advice readers on how to get your business in the best shape for acquisition.
