At Lion People Global, we often talk about the importance of “Seller Incubation” when helping companies get ready for sale.
In general business terms, “incubation” refers to some kind of customised support that you receive in order to develop your business and to accelerate the growth and maximise your potential.
“Seller incubation” thus refers to the various supports that are available to company owners who are looking to sell.
Whether the owner of a company wants to retire now, two years from now, or five years from now, the bottom line is that you have to get ready. Otherwise the risk is that you might not get what you want.
Types of support includes professional services, which can be in the form of specific, tailored, hyper-personalised consultancy in the areas that you need, or investing in key hires.
Some companies may need help developing a solid growth strategy to help them reach a certain level, but even for companies that are performing at a very high level, professional support will be required before they are ready for exit.
“If you think that you can find the answers on your own but it might take you too long or you are too involved in so many other things that you don’t have time to think, you will achieve faster and more solid results if you involve professionals that have gone through all of that already,” Olga Blasco says.
“For companies that already tick all the boxes, because they have nice clients, because they have niche expertise that is coveted, because they have invested in technology and because they have huge potential – even when you have all of that, you might still need guidance in order to prepare for exit.
“Maybe you need guidance in pitching, maybe you need guidance in presenting yourself and why a buyer should want to get you. Maybe you need guidance and help in how to prepare the deal structure that you want.
“Even for companies that might know exactly what they want and how to get there, but they are still facing an exit for the first time in their lives. So that doesn’t take away from the fact that they might require some assistance.”
While some companies are glad to hear that this is a service offered by Lion People Global, others are more hesitant, whether that is the additional cost of hiring new staff or consultants, or the fact that there isn’t guaranteed results or maybe they just feel like they really can’t afford it.
To these companies Olga asks: “Have you thought about the cost of not doing anything?”
“Can you afford not to do something? Of course you can cap your expenditure and say, okay, I’m tightening my belt, I’m keeping my profit margin good. But you might not grow if you do that.
“So you might stay where you are at best, or you might lose business to competitors at worst.
“So my advice in that case is try to visualise what it’s going to cost you in the long run to keep going as you are without addressing the areas that can make the difference and turn the dials.
“Consider that if you don’t act, you might not achieve what you want and you might not get the buyers to offer you what you want.
“If you want to build value and you’re facing that decision, that fork in the road, get somebody to walk the road with you or part of the road with you and get the help that you need, and in that case, you have higher chances of success.”
If you want to know more about this area, visit Lion People Global’s website where you can watch back our M&A Talks series of videos and fill out a questionnaire that entitles you to one hour’s free consultation on getting a LSP or language tech business ready for sale.