But thousands of mid-market CEOs are not ready to execute an exit strategy by selling their company, even though they’ve long determined that’s what they want to do, said Peter Lehrman, CEO of Axial, a New York City-based online M&A platform that connects private middle-market companies to capital as they grow or exit their business.
“It’s very important to have a meaningful amount of preparation and lead time,” said Lehrman. “Some mid-market companies take the process seriously, but others chronically procrastinate on an exit strategy. And if you’re not prepared, it’s much, much easier to make mistakes,” he said.
Lehrman outlined a four-step process he recommends for mid-market CEOs and owners planning to exit their companies through a sale.
1. Be prepared at a high level. This means understanding your options and having a list of potential buyers for which you’ve done due diligence and feel they would be the best fit. Then find a reason to connect with them and start a dialogue of introduction. Also, make a list of their appropriate qualities and strengths so that when the time comes, you can look for other companies that look like them.
“There are thousands of private-equity firms and corporations making acquisitions, so every CEO should have a sub-set of relationships with the most likely and active of buyers in their market. If you wait to have relationships until you want to sell the company, you are doing yourself and the company a disservice.”
2. Get your financial house in order. That includes making sure the company has audited financial statements. “Getting an audit isn’t super-cheap, but it’s much less expensive than having a transaction go sideways” over the lack of it, Lehrman said.
3. Retain an advisor to help. “You need to have the right advisor around you to help you go through the process,” Lehrman said. “This is an area where both startups and mid-market companies consistently underinvest, then they’re very disappointed when they don’t get the results they hoped for.”
4. Know what you want and flesh out all possible scenarios to understand where they could end up. Lehrman said that if a CEO “doesn’t have a clear objective in mind when thinking about selling the company, or about raising capital, then it’s very hard to drive toward a successful goal. Do you want to sell the company or raise capital and keep it going? Retire or continue to be a CEO, partner or advisor after the sale? You must have answers to those questions.”
With the aging of the baby boomer generation, the next decade or so will see “the biggest transfer of American private companies probably in history,” Lehrman said. Following his advice can lead to successful outcomes for you and your business.
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
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1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
