Successful M&A events require planning and careful execution. There are plenty of opportunities for entrepreneurs to stub their toes (sometimes disastrously) on the way to the bank. Any attempt to list all the potholes expands rapidly, but here are ten situations with the potential to radically reduce shareholder value if handled improperly.
- Wait until your business is in trouble.
Buyers are quick to sense a company that is desperate, so if there is no choice but to be the object of a fire sale, don't expect to get top dollar or the best terms for your company. I recognize the challenges of keeping afloat until unfavorable tides have receded, but going to market when the story has improved will greatly expand your options. Always better to sell on the way up, not on the way down. By then, it could be too late to attract a buyer at a favorable valuation. And, little harm is done if you test the market early, but if you wait too long it may be too late.