Mergers and 'Asset Acquisitions' Sweeping the Commercial Printing Industry

By Erik Cagle

M&A Checklist: 10 Essentials When Selling Your Business

Most people do significant planning going into a business venture, but little at the time of exit. However, if you know what to expect—and make some plans and adjustments—your results and rewards can be a lot more fortuitous. Here are the top 10 things to consider as you move toward selling the business you have built and loved.

1. Establish goals.

What do you want to accomplish for you, your business, your people, your family, etc.? Think through the impact of these, and how they affect all constituents.

2. Create a document that fully describes your business so others can best see the value.

This is often the most difficult step, yet it is the most critical in ensuring maximum reward and ongoing life for your business. There are several things about your business that may be impressive to you but not resonate with a potential buyer.

3. Timing.

Do you have to sell, or do you want to? Your timing—in what’s happening in the marketplace, where your business is at, where financial markets are—can be critical in achieving your goals, or not.

4. Craft a business plan going forward.

Your company needs to have life after you. Carve out profitable potential paths a new buyer can realistically take with your business. The more options you have, the greater the pool of potential suitors.

5. EBITDA.

This is the typical gauge people use to value what you built. Present this fairly, but research all possible add-backs to ensure your maximum (adjusted) EBITDA.

6. Think beyond local competitors.

Many companies start the sale process by talking with the guy down the street. Not only can this cause devaluing rumors, but also your local competitors are typically not your best buyer—strategically or dollar-wise.

7. Customer base.

Buyers need to know their investment won’t be at risk. Are you overly reliant on particular large accounts or vertical markets? Diversity will provide you greater value.

8. Differentiators.

What sets you apart in the industry? Where are your strengths and weakness? What would you be focusing on if you weren’t selling the business?

9. Management structure.

Define the new leadership team and demonstrate how these people can drive your business without you. After all, businesses are people. Show that you have the team that can give the company what it needs for the future. Alternatively, this can show a strategic what it can to eliminate if it becomes the owner.

10. Financials.

Private companies handle financials numerous different ways. Are your financials audited or just reviewed? Make sure these are in order before you do anything. You may discover issues that could entirely change your actions for one through nine.—Bob Cronin

Bob Cronin is Managing Partner of The Open Approach, an M&A firm/consultancy focused exclusively on the world of print. To learn more about The Open Approach, visit www.theopenapproach.net, e-mail Bob Cronin at bobrcronin@aol.com, or call 630-323-9700.

The calendar tells us that it is May, a time of renewal and blossoming. Spring always offers optimism, a reminder that what has been cold and hidden for too long can now be basked in warmth and resplendent in full flower.
That optimism carries over to the economy, the great X factor in the printing industry. A more favorable economy means greater marketing budget spend for clients and greater availability of low-hanging fruit for printers. And, from a mergers and acquisitions (M&A) standpoint, there are many ramifications.

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