It is never a good thing for everyone in your business’ ecosystem to think it is for sale. But there is a reality and you have to deal with it. The reality in most cases is not that you are for sale, given you are not going to sell if the price and all other terms are not to your liking, and particularly if there is no Buyer for it. The reality is that you are exploring your alternatives, as every business owner should do on a continual basis to be most responsible to his or her employees, customers, family, investors, and even community. None of those constituents would be satisfied with a business owner that is not curious, conscious about markets and market conditions, the competitive environment, and economic forces affecting the business.
Every situation is unique, but generally we recommend the following:
- Owners agree amongst themselves, with advice from their transaction advisor, on the communication message and strategy;
- The message is generally: “As owners, we continually monitor market conditions as well as the needs and interests of our employees, customers, investors, families, as well as our own personal needs. At times, we find it beneficial to explore our strategic alternatives, which might include taking on investors, aligning with new partners, and even selling a partial or entire stake in our business. We are doing that now and commit to keep you apprised not of every element of the process, which would be distracting for all, but of anything material that might affect our constituents.”
- Share this message directly and verbally (not in writing) with, usually in this order, (1) minority owners, (2) managers, (3) employees, and (4) key customers and vendors (if it is determined they would care);
- Ask everyone with whom you share the message to keep the information confidential (which they likely won’t do, but it’s still work asking); and
Never announce a sale until you have a binding contract and all contingencies have been eliminated. The last thing you want is to announce a sale and then have to announce the sale has fallen through.
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