3 factors to consider before selling your company

By and |  September 10, 2018
PHOTO: iStock.com/huePhotographyz

PHOTO: iStock.com/huePhotographyz

Currently, merger and acquisition activity in the pest control industry continues to surge. How long this will last is unknown. However, this trend should continue to remain active for some time thanks to the favorable business climate, low interest rates, access to loans and capital, strategic planning and growth of pest control companies, and entry of private equity firms in the industry.

Deloitte conducted a recent survey of more than 1,000 corporate executives and private equity investors, and the consensus was that merger and acquisition activity would continue to accelerate. Approximately 70 percent of executives interviewed in the U.S. and 76 percent of executives from domestic-based private equity firms believe that deal flow will continue to increase.

Stuart and Donna Aust

Stuart and Donna Aust

Other factors to consider

Although your company may be ready to sell, the question is, are you? Here are some of the “softer” factors to consider when deciding it’s time to sell:

  1. While all the internal and external selling factors may or may not line up, you may not be ready. Some owners make the decision to keep their business in the family. Others decide to sell. It’s a very personal decision. Your desire might be to grow your business for now and sell in the future. If that’s the case, it’s important to keep in mind that the due diligence (pre-sale) and integration process (post-sale) can take six months to a year and a half. Plan accordingly.
  2. Others see that selling can translate into higher income. They realize that investing the payment from the sale of their business can exceed their annual salary as owner. The return of your investment with a wealth advisor or in real estate can be quite lucrative. Selling your company does not mean it is time to retire. In fact, the sale can be the start of a new beginning that allows you the freedom to pursue other ventures, such as starting a new business, traveling, serving your community or church, or continuing to work for the new buyer. For instance, selling our company allowed us to start The Aust Group.
  3. When choosing a buyer, keep in mind that you will likely be staying on at least six months to a year. In addition to getting your target price, you may want to ensure the cultures and leadership styles of the two companies are closely compatible. This can ease the transition between staff members, as any merger can bring a certain level of stress.

When you receive one of those offers to buy your company, don’t be so quick to dismiss the prospect of selling. It’s easy to disregard the idea of selling when your revenue and profitability are surging and all is well. Defying logic, this could actually be the right time to give serious consideration toward selling your company, as it can yield the highest return.

STUART AUST is president and DONNA AUST is chief editor and consultant of The Aust Group, a mergers and acquisitions consulting firm based in Upper Saddle River, N.J. Stuart is also a PMP columnist and former owner of Bug Doctor and its affiliates. He can be reached at stuart@theaustgroup.com.

Comments are closed.