Most mergers and acquisitions fail. Do you know how to succeed and prosper?
After all, your liquidity event is the most important financial decision of your life.
The statistics aren’t great. Up to 90% of liquidity events fail. For “successful” liquidity events, the buyer keeps 50% to 100% of the deal value.
Insult to injury, business owners don’t know how much money they’ve left in the buyer’s pocket.
To succeed and prosper in your liquidity event, do you know where to start and what to do?
Success in both business and life is often knowing what not to do.
Who am I, and how do I know?
I started my eLearning business after graduating from my MBA program. I had no money, experience, or team. The truth is I had no business being in business.
My saving grace was my grit and determination, which created success.
With success, I received a 7-figure offer from an experienced buyer.
I said “no” to the 7-figure offer and “yes” to mastering the art and science of a liquidity event. Then, two years later, I said “yes” to a 9-figure offer from a different buyer.
Today, I pay it forward. I help business owners through the 90-day Deep Wealth Experience. At the heart of the Deep Wealth Experience is the exact 9-step roadmap that I created for my 9-figure exit.
How did I go from saying “no” to a 7-figure offer and “yes” to a 9-figure deal?
The 9-step roadmap of preparation was my saving grace. Preparation is the key that unlocks deal certainty and enterprise value.
It’s the exact 9-step roadmap that has you master both the art and science of a liquidity event.
Do you know the five fatal mistakes that cause most mergers and acquisitions to fail?
The magic in new beginnings is truly the most powerful of them all — Josiyah Martin
Why do mergers and acquisitions fail?
Business owners aren’t prepared for post-exit life.
Before starting your liquidity event journey, you must ask only one question.
The one and only question to ask is: Now What?
Imagine you’ve sold your business. Congratulations!
You’ve bought your toys and traveled the world first class. You’re on the beach sipping your victory Margarita. And, are you ready for it? You’re bored out of your mind.
Believe it or not, you miss the daily grind, the challenge, the fulfillment, and the purpose you once had.
It’s official. You’re no longer living the entrepreneur life.
Imagine that you have all your toys, traveled the world, and you’re bored out of your mind. What will you do for the rest of your life?
Most business owners are the business, and the business is them. Life without the business is unimaginable.
And this is the problem.
What can you do?
Find activities outside the business that leaves you both energized and feeling fulfilled. Over time you’ll create new rituals that you will on after your liquidity event.
After all, success without fulfillment is a failure.
All the money in the bank, achievements, and awards mean nothing if you’re not fulfilled.
Would you like a resource to help you with your post-exit life?
Listen to episode 39 on The Sell My Business Podcast:
Ready for the next fatal mistake that causes mergers and acquisitions to fail?
You are what you believe yourself to be — Paulo Coelho
Mergers and acquisitions fail when business owners abdicate the process to their advisors.
Mergers and acquisitions fail because business owners are at the extremes.
One extreme is business owners who don’t hire advisors. The do-it-yourself approach is driving on the road called careless with a destination to disaster.
The other extreme is business owners who hire advisors but become missing-in-action.
Advisors are a must-have for your liquidity event, but your participation is crucial.
Your advisors have an agenda which doesn’t align with yours. Your advisors want to get a deal done, but you don’t want any deal. Instead, you want the best deal for yourself.
Your investment banker is the lead advisor when it comes to your advisors. Your mission is to let your investment banker run the process.
Know that the best investment banker in the world doesn’t know your business as well as you. It’s up to you and your team to create the narrative.
A compelling narrative for your liquidity event does the following:
Your role throughout the liquidity event is not the lead role but a support role. Know that your guidance through your narrative helps you capture the best deal.
Next up, do you know the actual currency of your buyer?
To capture the deal of your dreams, build the highest level of trust with your buyer — Jeffrey Feldberg
Mergers and acquisitions fail when you lose the trust of the buyer.
A lack of trust has your buyer either walk from the deal or lower enterprise value. Neither scenario is desirable.
How do you build trust with a buyer?
For starters, you tell the absolute truth from the start and hide nothing.
Beyond telling the truth, three areas hamper trust.
First, the business doesn’t run without you, which has your buyer viewing the deal as too risky.
Second, your management team is weak. The bench strength of your management team is everything for your future buyer. It’s your management team that runs the business when you’re no longer around.
Third, you miss the projections that you created for the liquidity event. So, yes, you must both run the business and have a liquidity event simultaneously.
Some buyers play to your ego to have you create unrealistic projections. Temptation is high as the more revenue and profit you show, the higher the value of your business.
Don’t fall into this trap. Business owners who under promise and over deliver win the day.
You’ll make mistakes during the liquidity event. But, at the same time, know that a buyer who trusts you will often overlook the errors.
Trust is everything when it comes to your liquidity event. So play the long game and earn the trust of your buyer.
Ready to uncover what you’re doing today that will hurt you tomorrow?
The art of success is tuning in to everyone’s favorite radio station WII.FM (What In It For Me) — Jeffrey Feldberg
Why do mergers and acquisitions fail?
Business owners are selfish and think only of themselves.
Step three of the 9-step roadmap, Future Buyer, has you master the art of thinking like a buyer.
Your future buyer’s mission is to do two things. First, reduce risk as much as possible. Second, enjoy the highest possible return on investment.
Your mission is to create a compelling narrative for the buyer.
A compelling narrative paints the picture of a bright and prosperous future.
Remember, your buyer knows what your business did today and yesterday. Your buyer wants to know what your business will do after the liquidity event.
Data, facts, and case studies that both show and tell the buyer are woven into your narrative.
Don’t believe for a moment that the value of your business is a complicated formula in a spreadsheet.
As the saying goes, beauty is in the eye of the beholder. How you position your business through your narrative is everything.
Step three of the 9-step roadmap also helps you learn how you identify the buyer with the best cultural fit. The offer with the highest number may not be the best offer.
When you think like a buyer, you now have the opportunity to create trust with your future buyer. Trust from your buyer shortens the time you’re in the market.
When it comes to liquidity events, speed always wins.
Ready to learn the most common reason why mergers and acquisitions fail?
It takes as much energy to wish as it does to plan — Eleanor Roosevelt
Mergers and acquisitions fail from a lack of preparation by business owners.
Don’t make the fatal assumption that the skills that built the business are the same ones to sell it.
When you start a liquidity event, congratulations! You now have a second full-time job.
You must now both run the business and the liquidity event simultaneously.
When you’re not prepared for a liquidity event, you lose your time, health, and money.
Count on many late nights and early mornings, including weekends. The little amount of free time you had is now gone.
It doesn’t take long for the lack of sleep and stress to play on your health.
With your time and health on the line, you hire expensive outside consultants. The consultants now do the work you and your time could have done.
Your lack of preparation exposes problems in your business for your buyer. As a result, your buyer either walks away or penalizes enterprise value.
What can you do?
The 9-step roadmap of preparation helps you increase enterprise value. You also save your health, money, and time.
Step four of the 9-step roadmap has you perform an internal due diligence audit. You find and remove skeletons in the closet. You also find the hidden Rembrandts in the attic and put them out for public display.
Enterprise value increases from making fewer mistakes in the liquidity event. At the same time, your Rembrandts reinforce your higher enterprise value.
Along the way, you improve your business model and management team.
Preparation creates a win-win-win.
Up to 90% of mergers and acquisitions fail. Business owners make fatal mistakes from start to finish without realizing it.
Think about the wasted time, effort, and money.
Your liquidity event is your most significant financial transaction.
How do you avoid becoming a statistic and capture not any deal but instead the best deal?
Master the art and science of preparation.
My journey began with me saying “no” to a 7-figure offer and “yes” to mastering the art and science of preparation. Then, while running my business full time, I dove into the world of mergers and acquisitions.
After creating the 9-step roadmap, I said “yes,” two years later, to a 9-figure offer.
Today, I pay it forward and help business owners master the 90-day Deep Wealth Experience. The 9-step roadmap and Deep Wealth Experience goal have you do two things.
First, you create a blueprint to maximize the value of your business. The strategies of preparation are the same for growth.
Second, you develop the certainty that you will capture the maximum enterprise value.
The best time to start your preparation was years ago. That said, the next best time is today.
Yes, mergers and acquisitions fail, but you don’t have to become another statistic.
Start with the first strategy and stay with it until mastered. Once mastered, move on to the next strategy and do the same. Before you know it, you’ll have mastered all five strategies.
You can do it. I know you can.
Here’s to you and your glorious success!
Your Biggest Raving Fan,
When it comes to your liquidity event, are you leaving millions on the deal table? Visit www.deepwealth.com/success to learn more