Jun 7, 201810:24 AMExit Stage Right
with Martha Sullivan
Why you should kiss lots of frogs
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Dating has changed a lot since I was in the market. Today, soul mate seekers spend less than 60 seconds looking at a profile on a dating site before swiping on to the next one. Viewers focus predominantly on the photos, not your cleverly worded description. According to some research, it takes an average of 84 “matches” before you really hit upon a successful match.
For those currently in the market, the message of “you have to kiss a lot of frogs” has been heard loud and clear. Our relationships are deeply personal and important to us, so it make sense that you don’t want to settle down with the first toad to pop up on the screen.
Similarly, when selling your business to a third party, you want to have confidence that you are putting the care and future of your company and all your stakeholders in good hands. So why is it so many business owners settle down with the first frog to hop up to and kiss them?
Time and time again, I see this in our practice. A known friendly competitor calls you up, asks you out for a beer, and you get talking. Or maybe a call comes to you out of the blue with someone interested in your company. Before you know it, you are walking down the aisle and signing papers without really having checked out your other options. I’ve heard many explanations for this, including:
- I know and like this person — meaning I think it’ll be an easy sale and this person won’t screw me, right?
- I don’t have alternatives, although I haven’t really explored the various options out there.
- I can do this myself — meaning I don’t want to pay a fee.
- It seems like a great deal!
This match made in heaven may not give you your best outcome though. Consider:
Quality of the match: You know that selling your company has many facets, as I’ve talked about in other posts. You face many decisions: What are my alternatives for exit? Do I want to take all the chips off the table or stay in the game in some way? What’s non-negotiable? How do I want to advocate for my stakeholders?
You have goals and priorities. When you go with that first frog, you take a big risk that you may unknowingly fail to honor what’s important to you.
Experience: Chances are your frog has been playing at the pond a lot longer than you have. He buys companies as often as he eats flies. He knows what he wants from you.
You’re skilled at running your business. You may or may not have thought about what you really want from him, but you’ve heard about frogs and toads and even educated yourself about them. However, that is very different than hopping into the deep end of the pond when you’ve never learned to swim.
No competition: Your stunning suitor faced no competition. This gave them control over the relationship before you ever finished your first beer. Did you get the best price and deal structure with all your priorities met? Chances are you didn’t
This is a time to explore your alternatives and create some competition.