Wrong question. Focus less on “when” and more on “why!”
Forget about drawing that timeline. Milestones can be dangerous. Owner comfort is high in deciding what milestones are appropriate because these road markers focus attention on a single path forward that speaks to the sale of one’s company. This is great for running a business but messy in deciding when to sell.

Unfortunately, this powerful event in the history of an enterprise cannot be programmed. Conforming to a yellow brick road that may or may not materialize not only frustrates decisionmaking but can easily add to confusion. What owner-operator wants to be on the wrong road or a road to nowhere for the sale of the business? They know merger and acquisition transactions, once done, are irreversible. The impact is forever to the seller.

The precise timing of an exit is driven by a mix of business and personal factors. Simply put, it is a real-time, deep dive look at the world that surrounds you and your company.

Do your personal assessment.
What matters most in your everyday private life? Does your company still take precedence? Are you alert to how you have changed? Are you honest with yourself? Are you prone to procrastinate or too slow in coming to terms with your present state of mind as it relates to the sale of your company?

The relevant question that should capture your immediate attention is … why now? First, recognize when you are near or at this strategic crossroads.

Second, grasp the meaning and significance of what you are feeling inside. Third, and perhaps most important, initially refrain from sharing with others in your inner circle. Allow time for private thought and try to read your own tea leaves. It’s good therapy. Eventually, you will know whether and how to reach out for guidance.

Early signs of being ready … or not being ready?
• “I really like what I am doing so the thought of selling is premature.”
• “I need to sell because I am nearing retirement.”
• “There is no longer that fire in my belly, and I worry I am losing interest.”
• “My bottom line tells me I can finally get my price.”
• “I have received an unsolicited offer, so maybe now is the time to sell.”
• “I do not want to abandon the people who stood alongside me over the years.”
• “I am not ready to turn this business over to the next generation.”
• “I am eager to write that next chapter in my life, which will be different.”

I could give more examples, but I think you get the drift. Some combination of the above invariably leads to knowing “when the time is right.” You need to be proactive.

Assuming you are ready … is your company ready?
Now this is an altogether different question.

On a single sheet of paper, list and explain in simple terms the “five things of high distinction” a buyer gets from acquiring your business.

Are all of the following five categories represented?
• Customers?
• Services?
• People?
• Reputation?
• Performance?

Where do you fit?
• Both you and your company are ready.
There is close alignment. You negotiate from high ground with suitors to get the best price. Timing is near perfect. Very happy ending.
• You are ready, but your company is not. All five categories do not appear. If getting your price is not the sole driver, then consider an immediate sale. Though timing is less than an ideal, you accept the tradeoffs. Still a happy ending.

n the other hand, if price plays a dominant role, then defer the sale. Turn your attention to the missing piece(s).

Hard deliverables in these categories are required to create the financial reward you seek. Quickly come to terms with this reality, and manage your business for results, especially in the short run. Happiness deferred as more work and commitment lie ahead. • Your company is ready, but you are not. Personal factors trump everything. Sale of your company is a longterm prospect at best. Be challenged and have fun climbing higher on your mountain. No ending, but this can be a very happy situation.

Trust your advisors.
Selling one’s company deals with a completely different set of circumstances and uncertainties. Successfully navigating across this murky landscape requires a telescopic lens that allows the business owner to see things from a distance. Unfortunately, being too close to the ground also means being prone to poor judgment or overreaction. The analysis must be approached from two very different perspectives as illustrated above [which are frequently in conflict with one another].

Put your professional advisors to the test in (1) helping you reason whether you are personally ready to exit, and (2) evaluating whether your company is also ready. The stakes are at their highest and, ironically, taking this intermediate step to reach out to seasoned financial and legal advisors can be the best decision you ever made.

Coauthors Dale Falcinelli and Travis Coley have extensive merger and acquisition experience in the HVAC marketspace. Both are investment bankers with Spouting Rock Financial Partners LLC (Radnor, PA) and hold licenses with FINRA. Having served on more than two dozen corporate boards, Falcinelli is chairman of the Baker Institute for Entrepreneurship, Creativity and Innovation at Lehigh University. Coley is highly recognized by the Silicon Valley venture community and numerous private equity firms for both capital raises and sell-side transactions. He has developed long-term relationships with global operating companies pursuing acquisition and technology transfer. Coley previously held positions with high-profile investment banks, including Tucker Anthony, Deutsche Bank and CIBC World Markets. For more information contact Dale F. Falcinelli at 610/417-1235, or Travis Coley at 856/577- 3398, or visit www.SpoutingRock.us.