Business owners reach a point in life when they begin considering what to do with the business to fulfill their larger life goals. They can continue to grow the business and pursue market domination. This might require a partnership (merger) or the financial support of private equity. If they’re ready to retire or want to be freed up from the burden of running a business, they can sell it to a strategic buyer. We help clients evaluate their options.
Whether you want a merger for growth, a financial investor, or a sale, you’ve got to understand what the interested parties are really looking for from the transaction. Of course, every business interested in your company wants to see strong financial performance, a shiny new fleet and dedicated employees. But there are often hidden motivations and value drivers that business owners aren’t aware of. When they try to undertake a transaction on their own without expert representation, they often miss opportunities to promote the company in the way it needs to be perceived by the other party. You don’t know what you don’t know!
Buyers are often evaluating aspects of your company that may not have crossed your mind. Maybe you’re touting the fact that you recently invested $1M in new equipment, but that’s not valuable if it doesn’t factor into the buyer’s equation for success. Instead, they need to hear how your three locations can help them strategically expand their market footprint without cannibalizing their existing service areas. This is an obvious example, but beyond geographic expansion plans, buyers look at very nuanced aspects of your business. You need to know what they are.
That’s why an intermediary with deep industry expertise can help seal the deal. There are a lot of M&A advisory firms and general business advisors out there, but most of them don’t know the inner workings of the equipment rental industry. They don’t really understand the acquisition strategies of the publicly traded companies and what they’re really evaluating when they’re considering companies to buy.
So if you’re in the equipment rental space, it pays big dividends to forge a partnership with industry experts who understand the key value drivers of buyers – and not just collectively, but a partner who knows the specific motivations of each prospective buyer based on a deep knowledge of that buyer’s history and how it pursues growth.
Have you ever undertaken a big deal without expert representation, like managing a lawsuit without a lawyer or doing your business taxes without a CPA? We think not. A business transaction is probably one of the biggest transactions in your life and there’s so much at stake – expert representation isn’t really an option, it’s just the smart thing to do.
If you’re considering a big business decision, we can clarify your options and help you determine which is best for your goals. Have you sold a business before? Did you go it alone or use an advisor? We’d like to hear about it!