So - you had a bad day ... it's been one of those weeks and it's only Monday. You used to love coming to work, love running your PEO but you keep getting calls and letters saying the "market is hot, values are solid." It's lonely at the top. As an entrepreneur you face new challenges daily. PEOs manage risk ... your clients want more - - more service, better technology, more bang for the buck. You know the drill and you say to yourself, "SELF - I think it is time to consider a sell." WHAT NEXT?"
Emotional Preparation --
Make sure it's not just a "bad day." Change for the sake of change is the wrong reason to sell. What goals to you want to achieve, personally and professionally? What changes do you want in your life? What do you want to create for your business, your clients and your employees? What do YOU want?
Review Your Options --
Review all your options, not just for an exit. Perhaps a different model is an option, or additional growth, or funding. If you decide to sell, you must feel confident you have looked down every alley and KNOW this is the right path.
Professional Preparation --
Complete a thorough review and analysis of your company - prepare, or have someone help you prepare a review all aspects of your PEO. How do you compare to other PEOs, what are your strengths and weaknesses? Is there a better model? Are there changes you can make now that make your company more profitable in the future? Is there a more efficient way to manage risk?
Be clear on what your company is Worth --
Get a professional valuation; know what you are worth and what a realistic transaction structure may look like for your specific PEO.
Tax Treatment --
Evaluate tax treatment for your company. Understand how specific tax implications differ by types of consideration - stock, cash, notes, or a combination. What does that mean for you and your shareholders?
Parameters for an Exit -
Know what your parameters are for selling. Examples include price, structure, equity participation, tax treatment, key employees/employment agreements, autonomy, transition and integration. What can you tolerate? Be realistic.
Understand the Process -
Once you decide to jump into the selling waters - have someone explain the process in excruciating detail so you know what to expect. Confidentiality agreements, marketing, buyer/partner options, due diligence, legal documents - and how does that close and the wire of your money honey actually happen?
Once you are mentally and professionally prepared to sell - then just "JUMP!" We have never seen a better time to consider a sell. And yes, you will continue to hear from us! Silva Capital Solutions, Inc. has completed 47 PEO transactions - we understand you and your business. We now offer CLIENT VIP DAYs, strategic meetings here in our Atlanta office -- to guide you through each step of your journey.
Today, tomorrow or in the future - we are here to serve. Call us if we can help in any way! CHEERS!!
Look for our next newsletter in this series - "I'm smart - Why use an Advisor?"