Consider these tips before you take action
For the January/February 2021 issue of Screen Printing magazine, I wrote an article with tips on selling a screen printing business. Here are a few key thoughts from that article.
The process can be daunting. Selling a business today is more strategic, costly, and time-consuming than it was when you started or joined your business. An experienced team of advisors can help you with the many legal, regulatory, financial, and emotional issues that typically arise during the process.
An objective valuation matters. An independent professional familiar with the screen-printing business can provide an opinion on the value of your business and what it will take to grow it over the next 36 months. Before buyers will even consider making an offer, they will expect an objective and reliable business appraisal and a 2-3 year financial projection that supports your growth strategy.
Think and act like a start-up again. Sketch out a roadmap that takes into account some of the COVID-19 changes that have affected your customer base and competitors. This includes any loans your business received through the Paycheck Protection Program (PPP). Then, take action to develop new solutions. What emerging problems is your business equipped to help your customers solve?
Marketing helps you stand out. Invest in expanding your online presence and customer experience, digital marketing, and social media capabilities. Build brand awareness and revenues in niche markets. Update your website. Demonstrate that your staff knows how to connect with the newest generation of print buyers.
Don’t risk ruining your reputation by shutting down and walking away. Finding a larger, well-financed buyer for your business helps ensure a more stable future for key suppliers and employees and preserves the legacy of the company you worked so hard to build.
A Few Additional Do’s & Don’ts:
Don’t stop running your business.
Avoid the temptation to slow down and coast as you prepare to sell your business. Share on X
It’s impossible to predict how long it will take to find a buyer and complete the sale. In the meantime, you can’t let your financials drift downward. Now more than ever, it’s important to show that your company is well-managed and headed in a positive direction.
Do think like an investor. The new owner will have a growth strategy in mind when they inquire about your business. Investors care less about the history of your business than its future potential. Strategic buyers seek ready-to-grow capabilities that otherwise might take years to develop. If you have proven your ability to diversify into new markets or have hired and trained some exceptional employees with specialized skills, the buyers will take notice.
Do plan what’s next. Think it through and document your strategies and timelines. Have a clear vision of what you would like to do after you exit the business. How long will you make yourself available to the new owners? How will you spend your time exiting the business? Research what steps you can take to ensure a smooth transition.
Do invest time in selecting an experienced team of professional M&A advisors. You will need an M&A legal advisor, succession and estate planners, a CPA, a tax advisor, a real estate expert, and insurance and intermediary advisors.
It may take three to five years after the sale of your business to know whether you and the buyer negotiated a win-win deal. How well you support the post-sale integration of your company into the new owner’s business strategy will reflect favorably on your skill as a business leader.
Read the full article from Screen Printing magazine here:
Six Tips for Selling Your Screen Printing Business | Screen Printing Mag
What’s your best advice for ready-to-sell screen-printing business owners? I’d love to hear from you. (561) 543-2323