When wondering a way to sell a business, contemplate the board as a piece of the package? A stellar board of administrators enhances performance of a business in addition to its reputation and identity. Prior to offering your company for sale, it is important to make a board if you do not have one in place. Believe it or not this method can take as little as three to 6 months to place in place – even if you are beginning from scratch. Valuable and in-demand employees can take time to corresponde with, and you will need to launch a replacement board successfully without rushing.
It will take over a year to change an existing board, particularly if you don’t have established term limits and need to allow gracious exits for directors. How does that match along with your timeline to sell an organization? If it should be included in your exit strategy, integrate it into the timeline.
Examine your current board and choose if all its members contribute significantly or if bringing aboard new members would serve your business and its sale. When we work with clients and new or existing boards, we will need to assure that term limits are set thus you will be able to rotate members in a skilled manner based mostly on your wants and their qualifications and performance, and to sell the business. Selling a business calls upon many different skill sets, and this can be used as an honset method to eliminate board members off the board.
Evaluate current and prospective administrators not solely for his or her contribution, however also contemplate how a buyer would view them. For example, a business trying to expand into international markets might bring aboard directors with relevant expertise or an educational expert in the field. It signals your commitment to bring targeted and objective advisors on board.
The board may be comprised of family members who have skilled credentials and members within and not currently a part of the firm. At a non-public company, it is acceptable and expected that members of the family and insiders will dominate, but expert outside board members will bring vital insights and helpful networks that potential consumers can value. Your selling effort needs to include your board, especially since they and company shareholders can approve the end deal. You may involve the chairman, certain directors, or set up a special committee to be an objective resource for evaluating numerous alternatives and buyers.
If you are uncomfortable establishing a board of administrators, think about a strategic advisory board. In contrast to a board of administrators, a strategic advisory board bears no fiduciary responsibility and has no organizational management over management. It will supply constructive experience, support, and guidance to you and a new owner without governance and administrative duties of a board.
Being a business owner can be a lonely position to be in. To avoid ‘drinking your own Kool-Aid,’ bringing in a robust board of professional and objective administrators or advisors has real value to you as you begin the process of selling a company that potential consumers will value highly.
I invite you to use these ideas as you begin the journey to sell a business.
Marian Cook is a highly sought after business transition expert and speaker with over 25 years experience helping business owners design their best-life exit strategy, and improve their business performance and valuation. She is the co-author of “Selling Your Business For More: Maximizing Returns For You, Your Family and Your Business” (published by Macmillan). If you are ready to sell a business and jump-start your business sale process, connect with Marian via her free tips, articles, checklists and blog at Business Transition Experts.
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