Selling your company is one of the most challenging aspects of owning a business. Longtime colleague and Distribution Team Senior Advisor, Marshall Jones knows the mental, emotional, and procedural challenges well. Those experiences put him in a unique position to assist other sellers through the process. Jason and Marshall review a client case study highlighting critical aspects of securing a successful (and profitable!) sale and tips for avoiding deal-breaking pitfalls.
“It’s a deep process. It’s a difficult process, and it’s something that you don’t get trained on. There’s really not a course that you can take on how you effectively sell your business,” says Marshall, who bought, built, and sold a successful regional distribution company in the construction supply arena. He’s parlayed that experience into helping distribution entrepreneurs do the same.
While many owners are diligently readying the next generation to take over, others don’t have a successor to pass that torch to. A sale might make more sense, but owners (as their title implies) have little experience on the seller side of things. “It’s a one-time deal. It’s a one-shot opportunity, and there is so much unknown about it,” Marshall admits. A lot of that secrecy is due to non-disclosure agreements baked into most sales, which keeps owners from sharing their stories. That’s where a consultant can help. A consultant has worked with multiple sellers and can lend firsthand knowledge of the sale process without violating any iron-clad “quiet” clauses.
There’s one aspect of every sale that stays consistent regardless of vertical or sale price: trust. “Trust lubricates our day-to-day business,” says Marshall. “But, there’s a whole other level of it when it comes to selling an entity. The buyers are working hard in a very short period to determine if they can trust what they’re being told [about the business].” Sellers often mistake that due diligence for a lack of trust. In reality, it’s simply good practice and necessary protection for both sides of the transaction.
Advisors can smooth over the emotionality of a sale. They keep critical aspects moving forward and shepherd owners onto the next phase of their journey, whether that’s a new entrepreneurial endeavor or a well-deserved retirement.
RECOMMENDED EPISODES
DT: Jason Bader & Marshall Jones On Supporting Organizational And Personal Mental Health
DT: Marshall Jones On Taking Over The Family Business And Employee Testing
QUOTES
“Without a doubt, the hardest part of your business ownership arc is the sale of the business.”
“The biggest component is trust, and trust is what lubricates everyday business transactions.”
“Whether you stay in the business and work through or exit immediately, I think there’s a path either way.”
“If you’re at a point where selling it is the right move for you, we can market any business immediately. It does not have to be completely squared away to be sold.”
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Distribution Talk is produced by The Distribution Team, a consulting services firm dedicated to helping wholesale distribution clients remove barriers to profitability, generate wealth, and achieve personal goals.
This episode was edited by The Creative Impostor Studios.
Special thanks to our sponsor for this episode: INxSQL Distribution Software, an integrated distribution ERP software designed for the wholesale and distribution industry.
