Good Companies Don’t Get Sold, They Get Bought

By Mike McCarron
Published: July 2, 2018
Key Takeaways

Be sure to take the following steps before deciding to sell your business.


You've decided it’s time to get out of the rat race. It’s going to be a lot more fun chasing golf balls than truckloads. You figure that selling your company should be no different than selling your house: Hire an agent (investment banker), write a fancy presentation and create an auction to jack up the price.


Before you pitch the 'For Sale' sign on the front lawn, think of the message your decision to sell will send to employees, customers and potential suitors (words like “desperate,” “giving up” and “risky” come to mind). Want to scare away your company’s key stakeholders at the worst possible time? Tell them you’re heading for the hills.

Good companies don’t get sold, they get bought. You’ll never get top dollar for a business that’s on the auction block. It’s nearly impossible to negotiate the best deal once you’ve played your hand and told the world you’re throwing in the towel. The eBay mentality works when you’re selling autographed hockey sweaters, not companies.


The best deals will always happen when someone comes knocking on your door. My suggestion is that you take the following steps and get ready to answer the door when you least expect it.

Build Your Brand

Create long-term value — and interest — by growing your brand. Focus on building a scalable, profitable and sustainable business model that produces real cash and has a strong balance sheet. Running a world-class company will get you noticed — and, one day, an offer you can’t refuse.

Clean the Closet

Only one out of every three signed letters of intent (LOI) ever culminates in a sale. The fastest way to kill any deal is to have a surprise bite you during due diligence. If you have skeletons in the closet, they will be found. Old lawsuits, tax problems or lost customer RFPs would all classify as examples of credibility breakers. Go to confession and deal with your past sins before they cost you a nice chunk of change with a buyer at the door. Honesty does pay.


Fill Your Boots

Small business owners spend the majority of their time working in their business, not on their business. The day you sign an LOI is the day 100 percent of your time gets dedicated to the exhausting due diligence process. It’s a huge distraction that will only be compounded if you’re focused on customer service and not closing the deal. Step back and determine who will fill your day-to-day boots while you’re still in control of your time.

Weeds Are Okay

Nothing is more attractive to a buyer than a growing enterprise. Growing like a weed will not only attract buyers, it will also push the industry multiplier toward the upper range of the scale. It’s also important to be able to articulate your growth and have a clear understanding of what is driving it. “Our customers are busy” won’t be good enough.


Think Like a Buyer

Deals between strangers rarely happen. There is almost always some form of existing personal relationship. If you’re interested in selling your company, make meeting potential purchasers a top priority. Learn about their business, how they think and what they find attractive in potential acquisition targets. For example, you may find that many acquirers like to see written contracts with customers. If your contracts are all handshakes, it might be time for a strategic detour. When you think like a buyer, you increase the chance of getting a deal done come show time.

Focus on what you can control and the exit strategy will naturally take care of itself. If someone notices your well-run company and the price isn’t right, it won’t matter. You don’t have to sell. You’re off the front line, you’re making hordes of cash and your handicap is in the single digits.

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Written by Mike McCarron

Mike McCarron
Award-winning writer, Mike McCarron, was one of the founders of MSM Transportation before it was purchased in 2012. Based in Toronto, Mike is currently the president of Left Lane Associates, a company that helps C-Suites “monetize” their transportation company. He can be contacted at [email protected] or followed on Twitter @AceMcC.

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