Hope is not a plan: How to get the best price when selling your business.

I recently read an article about the rental industry being in another period of aggressive consolidation. The author was previously employed with the large national chains through the last major acquisition cycle. He figured that there was likely another 12 to 18 months in the cycle, providing macro events don’t derail the economy.

Given the hell that business owners have been through the last two years, and the continued struggles discussed here selling definitely has some appeal I’m sure. Especially for those who were already close to the age of retirement, 2020 to 2021 may have been the push they needed.

I’ve been involved in a number of acquisitions both from my time with the major rental companies, and then through our own growth as private companies.

If you’re considering selling there are a number of things buyers look for if you want to get top dollar for your business.

1. company image
This is fairly broad, it includes things like making sure your fleet is up to date and well-maintained. Same goes for your facilities…paint is cheap. The thing that requires sustained effort is your profile in the community. Are you the go-to supplier for local events? Do you support local causes? This always makes a difference for brand loyalty. It goes a long way toward not having to be the cheapest guy on the block, and your prospective buyer knows it. If you’ve built a strong brand, they know they start from a strong position when they take over responsibility for setting prices and making sales for your company.

How is your social media presence? Are you actively promoting yourself? It’s mostly free and very easy. This will be one of the first places a buyer looks when kicking tires.

2. financials
Are your books in order? If you’ve got to “normalize” your income statement to make your business profitable, don’t expect anything other than asset value for your business. No buyer will pay any goodwill if you don’t have a reasonable net income. This also isn’t a one-year “cook the books” situation. Buyers will want to see a minimum of three years of consistent profits. A good accountant is worth their weight in gold.

3. staff
Do you have a key person in the operation? We pride ourselves on being indispensable to our business, but the reality is your business should be able to run as well with you on the beach in Mexico as it does with you on the counter. Do you have family members in key areas that will need to be replaced when you sell? If so, do that ahead of time. Also be prepared to stay on for a while to facilitate a smooth transition.

4. you
When you’ve become accustomed to going to the shop five or six days per week for the last 20 years or more, the shift to “freedom” can be hard. What can you focus on? We all know someone who seemed to age a decade within a couple of years of retirement. You’ve put your blood, sweat, and tears into something. Enjoy the rewards of your hard work. 

Adam Snook owns Just Bins, a Regina-based provider of waste disposal solutions.