Natick, MA – Your firm probably doesn’t have a “For Sale” sign out front, but every year the odds increase that you will become involved in discussions about a sale or merger. In a recent editorial in The Zweig Letter, Mark Zweig shared some tips on what A/E firm leaders must do if they are serious about selling their firms and cashing out.
Get completely clear on which of your principals will stay—and for how long—and who will go if you sell the company. This is extremely critical and cannot be ignored as any buyer needs to know this information. It will impact everything—price, terms and whether or not you can sell it—period.
Get your books in order. If your accounting is not up to date, get it up to date. If you have all kinds of personal expenses buried in the company financials, clear them out. No one can consider buying your firm without being able to see how you are really doing.
Make sure your corporate bylaws and buy-sell agreements will allow you to sell. I have seen this problem recently with a firm. They simply cannot consider any outside sale opportunities—period—as unanimous shareholder approval is required to sell the firm, and the odds of that ever happening with as many shareholders as they have are extremely low.
Untangle your real estate from the business, if you can. Most buyers do not want to be married to your office building. There are many reasons for this. So, if you own a building in the company, sell it to a smaller group of owners or outsiders and lease it back for a fairly short-term so the buyer has flexibility to combine your operations with theirs or to move elsewhere to a better/cheaper/more convenient space.
Be patient with the process—but not too patient. When you get a serious buyer, work out a timeline with them on how the deal could get done. Then, do all you can to get it done within that timeframe. Don’t just allow it to go on forever as you will hate the limbo your firm is stuck in and it will undoubtedly hurt your growth and profitability if things drag out too long.
The preceding was excerpted from an article that appeared in the The Zweig Letter, the voice of reason for architecture, engineering and environmental consulting firms. For a complete version of the article, contact Ed Hannan at [email protected].
ZweigWhite is the nation’s leading source of management consulting, information, and education for the design and construction industry. ZweigWhite brings together experts in strategic business planning, organization, operations, business valuation, ownership transition, human resources, recruitment, finance and administration, information technology, mergers and acquisitions, market research, marketing, project management and project delivery methods. The firm is headquartered in Chicago, with additional offices in Natick, MA, San Francisco and Washington, D.C.
For further information, contact Edward Hannan at [email protected] or visit www.zweigwhite.com.
