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Other Added - Looking to Sell Your Information Technology Company - Avoid Some Common Mistakes
Carve out a market position to maximize your marketing investmentIn the marketing world, positioning is a relatively new concept. Introduced in 1982 by marketing gurus, Al Ries and Jack Trout, the idea behind positioning is to clearly define what your practice represents to the patient. Through this unique position, a level of mindshare is devoted to your practice. These positioning efforts should clearly communicate what your practice offers.Prior to the 1980's, Madison Avenue advertising executives allocated as much money as they could to mass marketing and it worked pretty well. At that time, media venues included newspaper, billboards, radio and three major TV channels. Whoever purchased the most ad space won the battle for the consumer's dollar. Today cable television and the Internet have fragmented the market and our attention into niches, irrevocably changing the face of marketing. Marketers now had to be smarter; shouting louder than everyone else was no longer effective. Positioning was born to define a product and service to a marketplace whose attention is increasingly more divi
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agre
We have all heard of the tremendous power of visualization - the process of creating a mental picture of what you want as a means of acquiring or achieving something you desire. While it may seem like a lot of metaphysical mumbo-jumbo, I would challenge you to reflect on the goals in your life that you have realized and conclude that visualization was not an important part of the process.We've all done it in the past - think back to something good in your life that you worked for and achieved and you will undoubtedly recall having had a strong mental image of the outcome that served as inspiration and motivation.Create mental images of the things you want to achieve or acquire and bring them to mind several times a day. As part of my personal development program, I have documented what my goals are. I have them stored on my computer, and have a program that causes it to pop up three times a day. At first, I was just reading them, but an odd thing started to happen after about a week. As I read them, I unconsciously brought up the visual image I had created. In my mind's eye, I actually see
1. Selling because of an unsolicited offer to buy - One of the most common reasons owners tell us they sold their business was they got an offer from a competitor or more often these days, an Indian company looking to buy a customer base in the United States. If you previously were not considering this business sale, you probably have not taken some important personal and business steps to exit on your terms. The business may have some easily correctable issues that could detract from its value. You may not have prepared for an identity and lifestyle to replace the void caused by the separation from your company. If you are prepared, you are more likely to exit on your own terms.
2. Poor books and records - Business owners wear many hats. Sometimes they become so focused on the next version release that they are lax in financial record keeping. A buyer is going to do a comprehensive look into your financial records. If they are done poorly, the buyer loses confidence in what he is buying and his perception of risk increases. If he finds some negative surprises late in the process, the purchase price adjustments can be harsh. The transaction value is often attacked well beyond the economic impact of the surprise. Get a good accountant to do your books.
3. Going it alone - The business owner may be the foremost expert in GUI interfaces, but it is likely that his business sale will be a once in a lifetime occurrence. Mistakes at this juncture have a huge impact. It is especially critical to have a good M&A advisor if you are selling an information technology company because these companies do not fit traditional company valuation metrics. If an owner does not get the right representation and have several qualified buyers that covet his technology, he possibly can leave a lot of money on the table. Selling a technology company is complex. Is it a better deal to structure some of the transaction value as an earn out based on post acquisition sales performance?
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agree
Would you go to a dentist if the only tools she used are a chainsaw and a stick? Would you take your car to be serviced by a mechanic whose only tools were a chocolate bar and hairspray? Would you want to your child to go to an elementary school that only taught from a set of 1964 encyclopedias?Do you see the connection?It is simple- really. Every industry has tools that can be specific to that industry. The dentist would never use a chainsaw (even though it may feel like it). They use tools that are designed and that are necessary for the successful completion of their task- to assist with proper dental hygiene. The same holds true for ever other profession and industry. At the same time, to take tools that may not be useful to an industry can slow down the process.So here comes the question. Why is it that those that skip trace do not utilize the tools that are available to our profession or we try to use the tools of other professions to do our job?What are the tools available to the skip trace industry? You’ve heard me talk about some of them. Databases, each other and our
2. Poor books and records - Business owners wear many hats. Sometimes they become so focused on the next version release that they are lax in financial record keeping. A buyer is going to do a comprehensive look into your financial records. If they are done poorly, the buyer loses confidence in what he is buying and his perception of risk increases. If he finds some negative surprises late in the process, the purchase price adjustments can be harsh. The transaction value is often attacked well beyond the economic impact of the surprise. Get a good accountant to do your books.
3. Going it alone - The business owner may be the foremost expert in GUI interfaces, but it is likely that his business sale will be a once in a lifetime occurrence. Mistakes at this juncture have a huge impact. It is especially critical to have a good M&A advisor if you are selling an information technology company because these companies do not fit traditional company valuation metrics. If an owner does not get the right representation and have several qualified buyers that covet his technology, he possibly can leave a lot of money on the table. Selling a technology company is complex. Is it a better deal to structure some of the transaction value as an earn out based on post acquisition sales performance?
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agre
I picked up a copy of 'The Hangover Handbook - 101 Cures For Humanity's Oldest Malady'... not just in case I have some holiday cheer... but to get some awesome ideas for 2007 marketing promotions.There is a solid chapter of 101 ways to cure that hangover... as well as some hilarious chapters on:Boozer's Eye Chart, Great Drunks of History, I bet you don't know this... The pub survivors guideAnd the chapter that EVERY marketer should have on their book shelf...'The Boozers calendar - 366 amazing, fun, bizarre, offbeat, odd, unusual, weird, staggering, stupendous, delightful, true and invented reasons to have a drink every day of the year'A mouthful to say the least (and yes, pun intended)Think about all the different ways you could build marketing promotions around days like:March 22, 1766 - Explorer James Green Eaten by Cannibals, March 7 - Lassies Birthday, June 1 - Marilyn Monroe's birthday, June 13 - Alexander the Great dies from over eating in 323 BC, August 16, 1848 - Worlds first department store opens, October 5, 1872 - Picture postcard introduceds owners wear many hats. Sometimes they become so focused on the next version release that they are lax in financial record keeping. A buyer is going to do a comprehensive look into your financial records. If they are done poorly, the buyer loses confidence in what he is buying and his perception of risk increases. If he finds some negative surprises late in the process, the purchase price adjustments can be harsh. The transaction value is often attacked well beyond the economic impact of the surprise. Get a good accountant to do your books.
3. Going it alone - The business owner may be the foremost expert in GUI interfaces, but it is likely that his business sale will be a once in a lifetime occurrence. Mistakes at this juncture have a huge impact. It is especially critical to have a good M&A advisor if you are selling an information technology company because these companies do not fit traditional company valuation metrics. If an owner does not get the right representation and have several qualified buyers that covet his technology, he possibly can leave a lot of money on the table. Selling a technology company is complex. Is it a better deal to structure some of the transaction value as an earn out based on post acquisition sales performance?
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agre
Defects in ceramics are of interest to potters and ceramic manufacturers because they are a major cause of financial loss. They are of interest to collectors of ceramics because they may (or may not) reduce the value of an item. They are of interest to users especially if they can cause damage or injury in use.I (being old and having nothing else to do) decided to tell you what I remember about ceramic defects. I worked in the ceramic industry for a good part of my life.To understand ceramic defects you should know something about ceramic processing. If you are a potter or are involved in industrial ceramic manufacturing you know about ceramic processing. For those of you who are not familiar with ceramic processing here is the listing of the ceramic processes we will discuss in this series of articles on ceramic defects:Batching and Formulating:Selecting a composition for the ceramic and then choosing raw materials for the batch.We will cover this topic in more detail in Ceramic and Pottery Defects 2: Defects from Raw Materials and Batching Errors.
3. Going it alone - The business owner may be the foremost expert in GUI interfaces, but it is likely that his business sale will be a once in a lifetime occurrence. Mistakes at this juncture have a huge impact. It is especially critical to have a good M&A advisor if you are selling an information technology company because these companies do not fit traditional company valuation metrics. If an owner does not get the right representation and have several qualified buyers that covet his technology, he possibly can leave a lot of money on the table. Selling a technology company is complex. Is it a better deal to structure some of the transaction value as an earn out based on post acquisition sales performance?
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agre
Advertising gifts can be a great way to increase your business by getting your name out to clients and potential clients in a way that they will enjoy and appreciate. No one thinks twice about being handed a business card, however handing promotional coffee mugs to a potential client will have a great effect on the way that your client continues to think about you and about your business. It is your job to advertise yourself to your clients and to spread your own name and the name of your business to new clients and to refresh your business with old clients as well.Advertising gifts do not have to be expensive or complicated, either. Consider sending out a postcard with updates to your clients every so often. Make it interesting by having the face of the postcard be a great recipe that you and your family love this way you add that little extra personal touch to your campaign. If the postage is going up, send out two cent stamps to your clients along with a business card and a reminder that you are still available to meet their needs. An advertising gift at the right time to the right people
Do you understand the difference in after tax proceeds between an asset sale and a stock sale? Your everyday bookkeeper may not, but a tax accountant surely does. Is your business attorney familiar with business sales legal work? Would he advise you properly on Reps and Warranties that will be in the purchase agreement? Your buyer's team will have this experience. Your team should match that experience of it will cost you way more than their fees.
4. Skeletons in the closet - If your company has any, the due diligence process will surely reveal them. One of the key issues in information technology companies is the clear title to intellectual property. Are your employee agreements well written? If you hired outside programmers, was their agreement specific in ownership of their output? The concern of the buyer is that once it becomes public that the deep pockets company is owner, previous disgruntled employees or contractors may resurface looking to bring legal action.
Before your firm is turned inside out and the buyer spends thousands in this process and before the other interested buyers are put on hold - reveal that problem up-front. We sold a company that had an outstanding CFO. In the first meeting with us, he told us of his company's under funded pension liability. We were able to bring the appropriate legal and actuarial resources to the table and give the buyer and his advisors plenty of notice to get their arms around the issue. If this had come up late in the process, the buyer might have blown up the deal or attacked transaction value for an amount far in excess of the potential liability.
5. Letting the word out - Confidentiality in the business sale process is crucial. If your competitors find out, they can cause a lot of damage to your customers and prospects. It can be a big drain on employee morale and productivity. What if your head of systems development gets skittish and entertains offers from other companies and leaves while you are selling? The buyer wants your top people and they represent a significant portion of your future transaction value. If word you are for sale gets out, your suppliers and bankers get nervous. Nothing good happens when the work gets out that your company is for sale.
6. Poor Contracts - Here we mean the day-to-day contracts that are in place with employees, customers, contractors, and suppliers. Do your employees have non-com
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