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Should I stay or should I go?

Is now the time to sell your business, asks Bob Cronin of The Open Approach.

Deciding whether to exit is an age-old question, be it business, situation or relationship. But rather than pondering the lyrics of the 1981 Clash song, your most important consideration should be what’s right for you. Indeed, there will always be ‘trouble’ if you stay or if you go; you just need to make sure that any exit produces your ideal outcome.

The best circumstance in which to make the selling decision is one where you understand all issues ahead of time, as comprehensive knowledge – and insight – enable the opportunity to truly examine the situation, plan for all elements and details, and ensure success. Thus, it’s essential to have a competent advisor. While this is true even when ‘staying’ or ‘adding’ (buying), it’s perhaps most important when selling. While the first two can be altered down the line, you sell your business only once. The decisions you make need to be the best possible.

With that in mind, here are four considerations as you decide whether to stay or go:

Is the timing/market ideal? Entrepreneurs can get swept up in the chatter or stories of how their neighbor just sold for some ridiculous figure. It’s important that your goals aren’t just about trying to keep up with the Joneses Label Co, but that both the market and your personal timing make sense. Transactions have multiple elements to them, so a sell price on its own does not necessarily mean a lucrative deal. Instead, consider what indicators will guide you in a direction during the process. What’s the market showing for similar transactions, and how does your company compare? How are banking rates and terms? How well is your company positioned for the future? What kinds of buyers might be interested, and will these fit with your vision? If you aren’t ideally positioned, what do you need to do to get there? Will the return on investment be worth the time and expense? Moreover, if you do take these actions, will you still want to sell down the road, or will you be in a better capacity to buy or simply flourish? Enlist a qualified advisor who operates in the labels and packaging space to help you navigate these questions. A generalist will never be able to leverage your unique assets or shape you for your best results.

Am I controlling the sale? Labels and packaging is an attractive space. Unless your business is really tanking, there should never be a time when you’re not steering your decision. The best way to stay in control is through information. First, know your market and the realities of how your business stacks up. Second, know what all your options are. Your company may have several more opportunities than a 100 percent sale – even if you don’t want to stay on board. A partnership or merger, for example, may be more beneficial. Or, you can sell part of your share and participate in future growth. Finally, understand all the financial terms and how any offer truly compares. You will need a financial and legal expert to help you understand all facets and maintain control.

How does the business look upon transfer? Are the people and circumstances you care about provided for? Great financial offers can often cloud the picture about the disposition of your business. Equally important is achieving your vision for your brand and remaining people going forward. If your name will still be attached to the business, you will have an even greater interest.

You’re in the driver’s seat when it comes to what’s best for your organization. When you seek an avenue of either buying or selling, the dynamic that occurs impacts everyone in your company. That type of potential challenge says you need to understand all the nuances and make appropriate provisions.

Where am I pursuant to the sale? Is this indeed my objective? Make sure that the sale is the right move for you personally. Entrepreneurs who sell only for the cash are often remiss about exiting their hard-earned business. Where will you be afterward? Will you be launching a new venture, retiring, staying on the board, or something else? If it’s a complete change from operating a company, are you sure the move will achieve your goals? If you’ve been at it more than a decade, the shift will be difficult. Find an advisor who’s been through it themselves, and they can help you through your every consideration.

The final decisions around the impacts, drivers, financial and personal needs, and status of the business all reside in your hands. You can do with it what you want. But enlist the team that can ensure you capitalize on your greatest opportunities. As you decide whether you should stay or you should go, make sure the transaction overcomes all the trouble, as any regrets will surely make it double.

ABOUT THE AUTHOR

Bob Cronin is a regular columnist in Labels & Labeling, writing about M&A activity in the industry.

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