Selling A Company Prep Tip 2: Sturdy Board Talent Increases Business Worth | Small Business Online Help Guide
When wondering about the best way to sell a business, contemplate the board as part of the package? A stellar board of administrators enhances performance of a business and its name and identity. Before placing your company for sale, produce a board if one doesn’t exist. Believe it or not this method will take as few as three to 6 months to put in place – whether or not you are beginning from scratch. Sometimes the foremost valuable and high ranked workers can take a while to connect with, and you may need to launch a replacement board successfully while not rushing.
It can take over a year to alter an existing board, particularly if you don’t have established term limits and want to allow gracious exits for directors. How does that match along with your timeline to sell a company? If it should be included in your exit strategy, integrate it into the timeline.
Examine your current board and choose if all its members contribute considerably or if bringing aboard new members would serve your business and its sale. When we work with customers and new or existing boards, we will need to assure that term limits are set so you will be able to rotate members in a skilled manner based mostly on your wants and their qualifications and performance, and to sell the business. Selling a business calls upon several different skill sets, and this may be used as an honset method to eliminate board members off the board.
Evaluate current and potential administrators not solely for his or her contribution, however also take into account how a buyer would view them. As an example, a business wanting to expand into international markets would possibly bring aboard administrators with relevant expertise or a tutorial professional in the field. It signals your commitment to bring targeted and objective advisors on board.
The board may be comprised of family members who have skilled credentials and members inside and outside of the firm. In a non-public company, it is more than expected that the key players on the board can be members of the family or insiders that dominate, however keep in mind that outside members will bring in a fresh set of eyes and important insights, with useful networks that potential buyers will appreciate and value. Your selling effort needs to embody your board, especially since they and company shareholders will approve the final deal. You may involve the chairman, certain administrators, or found a special committee to be an objective resource for evaluating various alternatives and buyers.
If you are uneasy when thinking of building a board of directors, take into account a strategic advisory board. In contrast to a board of administrators, a strategic advisory board bears no fiduciary responsibility and has no organizational management over management. It will provide constructive experience, support, and guidance to you and a replacement owner without governance and administrative duties of a board.
Being a business owner can leave you feeling isolated. To avoid ‘drinking your own Kool-Aid,’ bringing in a sturdy board of expert and objective administrators or advisors has real value to you as you start the process of selling an organization that potential buyers will value highly.
I invite you to use these concepts as you start the journey to sell a business.
Marian Cook is a highly sought after business transition expert and speaker with over 25 years experience helping business owners design their best-life exit strategy, and improve their business performance and valuation. She is the co-author of “Selling Your Business For More: Maximizing Returns For You, Your Family and Your Business” (published by Macmillan). If you are ready to sell a business and jump-start your business sale process, connect with Marian via her free tips, articles, checklists and blog at Business Transition Experts.
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