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There are a lot of programs from service providers that seek to advise business owners on what to do after they have decided to sell their manufacturing business. I equate it to trying to jump on a ship just as it is entering port.
What happens, however, if you don’t know what to do or, more commonly, you don’t have the time to consider all of your options? This week, I had the pleasure of participating in a panel discussion with Tom Heide (CEO, Heide & Company) and Jeff Klaus (Regional President, Connecticut, Webster Bank) on these topics. We covered a broad range of issues, including the various options for accessing capital needed to grow, including debt and equity investments such as from family offices, private equity, and the like.
Here are some of the takeaways offered by the program panelists:
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Know your value / be in control by being realistic; have a clear well-defined strategy and a set of objectives you want to accomplish; evaluate what resources you have and those you need so you can execute on that strategy. The key is in the execution.
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As an owner / operator you spend the vast majority of your time “working in” your business because you love it, but not so much time “working on” your business. That’s where the difference in incremental value is gained. If you don’t do that, you’re going to leave a lot of money on the table. That’s just a fact.
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Access to all forms of capital (debt, mezzanine, equity) is more widespread than ever for privately-held businesses with under $100 million in revenue.
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If you are considering growing your company through acquisition, seek the early advice of a commercial banker who works in acquisition finance to understand what may be possible for financing.
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Understand the importance of “recurring revenue,” particularly as it relates to your contracts, because that is where investors will start looking first.
Copyright © 2020 Robinson & Cole LLP. All rights reserved.National Law Review, Volume X, Number 346
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December 12, 2020 at 01:30AM
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Strategies for Privately-Held Manufacturers That Wish To Access Capital to Grow or to Exit - The National Law Review
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