Note: Running weekly in FromGregsHead.com, PKF Texas – Entrepreneur’s Playbook® is a continuing series of tips brought to you by Greg Price. These run Sunday evenings during the BusinessMakers Radio Show on KPRC 950AM.
Greg: This is PKF Texas and another chapter of The Entrepreneur’s Playbook. I’m Greg Price, director of consulting solutions, and I’m here again with Byron Herbert, the director of our EAS practice at PKF Texas. Byron, welcome back to the playbook.
Bryon: Thank you, Greg.
Greg: So Byron, I’m hearing that there’s a buzz out in the marketplace that companies are out there looking to acquire companies. You’re an advisor to a lot of these middle market companies. What are they telling you?
Bryon: Several of my clients have been approached over the last couple years to sell their business.
Greg: So are they looking to cash out?
Bryon: Well, they’d like to, a lot of them, but it doesn’t always happen the way they hope.
Greg: So why is that?
Bryon: I think in most cases, Greg, they’re just not ready to sell. They haven’t done the due diligence necessary to get their company in a position that the market is looking for.
Greg: Can you share some insight with some of our viewers about what they should be doing?
Bryon: First, Phase 1 would be to get your company profitable and get it efficient. No point in running more sales through an inefficient process. And in that Phase 1 would also be drive your sales. Make sure that you have a steady increase in sales, and there’s a number of things we can do to help you with that. Phase 2 would be to polish the business. Get a management team in place so it’s not completely dependent on the owner. Get some infrastructure in place. Get rid of the debt on your balance sheet. Get your balance sheet cleaned up so it’s attractive to a buyer. And Phase 3 would be to drive the process yourself. There are a number of companies in the marketplace that will help you position your company, go to market with it, and help you drive the value of your company up.
Greg: Byron, I think you put together a white paper that has a lot more detail around this. Is that correct?
Bryon: I have, yes.
Greg: We’ll give the folks a link so they can get to that.
Bryon: Great, thank you.
Greg: We’ll have you back again some time.
Bryon: I appreciate it, Greg.
Greg: This has been another thought leader production brought to you by PKF Texas, The Entrepreneur’s Playbook. Tune in next week for another chapter, and remember, if you’re a seller looking to sell your company, you can get Byron’s white paper at PKFTexas.com/RoutetoProfits/