By Ron Edmonds, The Principium Group
One of things I often tell my clients is “Every deal has its time.”
What I mean by that is that many, many different factors involving a buyer, a seller, the economy, an industry and credit markets all have to line up for a transaction to have a chance of success.
I first heard that expression years ago when an attorney that I worked with on mergers and acquisitions transactions used it. I had always been confused and frustrated with the attorneys who seemed to give minimal attention to projects I had been working on. That is until the projects came to the forefront, at which time they devoted all the attention it took to move the projects along in a timely manner – even if it meant occasionally working 24 hours a day.
What I realized later was that they had a sense as to when the various angles of a potential deal began to line up and a deal really was possible, even probable. Working on it seriously before then was a waste of their time and their client’s money.
After working on merger and acquisition transactions for most of my career and nearly exclusively for the past six or seven years, I have come to have a deeper understanding of the meaning of “Every Deal Has Its Time.”
Clients often express frustration when deals take longer to materialize than they expect or want. There are, of course, many reasons for deals taking longer than people want.
Why do businesses take longer to sell than expected or, in many cases, not sell at all? The main reasons are (1) they are not priced right, (2) there is something unattractive about the business or (3) the business is marketed in such a way to attract as many potential buyers as possible. The list goes on from there and, of course, includes such items as other competitive businesses for sale attractive to the same buyers and, as we are currently painfully aware, a difficult overall economy and/or credit markets.
All of that is to say that if a business is to sell, a lot of things have to line up. If you are considering selling your business and a willing buyer appears who will likely offer a fair price, your deal may be “having its time” and it will be time to move. That is no time to discover that you have let your financial information get stale or that you have other complicating issues that will take time to resolve.
Many of the issues that cause a delay or a deal to not happen may be beyond your control, so you have to focus on the ones you can control – making your business as attractive as possible, eliminating potential roadblocks and, yes, pricing the deal right.
The most important thing you can do to make sure you are ready when the time comes is to be ready before your deal’s time comes. That will let you avoid the heartbreak and disappointment that comes from seeing a good opportunity pass you by and not knowing when you will get another chance.
Every deal has its time. Make sure you are ready when your deal’s time comes.