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Shari Forman spends a lot of time working with family-owned businesses in Chicago through her role at PwC, and few of them are in any hurry to step away from the companies that have come to define their lives.

“What we’re seeing within our client base is that there’s almost a reluctance to prepare for that moment,” says Forman, U.S. Private Company Services Tax Leader for the global professional services firm. “It’s almost a sense of denial, in some cases. A lot of the family businesses that I work with, there’s a hesitation for that first generation to step back. We see oftentimes that the individual, that owner, has a really hard time relinquishing control and is likely working far beyond what they expected they would because of their devotion to that business.”

PwC recently released its Exit Strategies Report, which shares best practices for private companies looking to sell their business in a market with more than $1 trillion in dry powder capital.

“The market is flush with capital right now and both buyers, and investors are looking to do deals,” says Fentress Seagroves, co-author of the report and Deals Partner at PwC US. “If now is not the time to exit, that’s completely OK. You may have a longer term strategy. Just be ready when you are ready to exit.”

Smart Business Dealmakers spoke with Forman and Seagroves about their findings from the PwC report and common mistakes to avoid when thinking about an exit strategy.

Know your business

Picking the right time to sell your business is rarely an easy decision, Seagroves says.

“It becomes an emotional decision, not necessarily just a financial decision,” Seagroves says. “If it's purely a financial decision, there’s lots of money in the marketplace and lots of different types of private equity and strategic buyers. But we see situations where the entrepreneur gets sick, or there’s a catastrophic issue with the business that wasn’t anticipated. It changes the outlook of the business. One of the real themes of this study is to make sure that this review of your potential exit is something you think about early and talk about often, so that when you are ready, you can move with pace.”

Seagroves and Forman agree that preparation is critical to making the right deal when you’re ready to sell.

“Know your business,” Forman says. “Know your risks. Know the things that you want to highlight.”

And it’s important to understand the tax structure that you would like to achieve and what’s most beneficial.

“It’s really thinking through those things ahead of the actual negotiation so that you know where you’re going and how you can most effectively represent yourself,” she says. “There are all sorts of things that can cause big concerns in the middle of a deal if they’re not addressed, things that are underestimated in terms of their importance in the actual negotiation.”

Another aspect of this preparation is ensuring that your company has a strong management team in place. This is not only good for your business, it also makes your company more attractive to potential buyers and/or investors and proves quite valuable when you begin the sale process.

“A strong management team allows you to run the business, any side projects you have going on outside of your normal work within the company, and at the same time, the very disruptive process of selling a business,” Seagroves says.

Run it like you’re not selling

As with anything in life, preparation ideally gives you the tools to perform a task better. When you decide that it finally is the right time to sell, the work you’ve done ahead of time will almost always pay off.

“You want to make sure your business is positioned as a scarce and really attractive property because there are lots of buyers for good properties and good businesses,” Seagroves says. “But buyers want a lot of data and a lot of information, and sellers can sometimes underestimate just how much time it takes to collect, prepare, present and defend their opportunity.”

Prep work should include addressing any negatives that could come to light in the potential buyer’s due diligence efforts.

“The more the sellers can do that and share the good, but also share the challenges and weave it into the story, it mitigates the impact and the leverage the buyer can have when they find something like that,” Seagroves says.

And find a way to make sure your company continues to perform well as the details of the transaction are ironed out.

“If you’re running the business like you are not going to sell it and preparing for it to be your long-term holding, you’re going to position yourself more effectively,” Seagroves says. “We see too many times sellers not hitting projections. That creates red flags and a lot of concern with buyers, and it weakens the seller’s position.”

Find a third option

If you’re still not ready to make a deal, but are uncertain about your own future, take steps to protect what you’ve built.

“There are a fair number of family businesses in Chicago that are still trying to run without a potential exit,” Forman says. “Make sure that you have the next generation of family members prepared to manage the company and run it into the future.”

There is also a third option to consider.

“I have one client that actually decided that the two things were different in terms of ownership and running the business,” Forman says. “So they decided to retain ownership and hire professional management to run the business in order to have a a break from that day-to-day activity.”