Thinking its time?

It seems a day doesn’t go by without being contacted by friends or associates that are in the early stages of considering a sale of their travel company. ?I get asked all the time, where do I start. On just such a call this morning I decided to try and articulate where one might start.? Not intended to be all inclusive, just a point of reference to get you thinking of what you might need to focus on.

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In no particular order (and not intended to be all inclusive) I offer the following.? All things that sooner or later you will need in the process.? Please note, having the ability to share this information timely will help expedite the process but more importantly send the message that you are a well-run organization.

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1.????? Get your financials in order: Ensure that your financial statements are up-to-date and accurate. 3 years P&L in a logical and accepted format. Know your numbers.? A current balance sheet as well. Your business is largely going to be valued on a multiple of EBITDA.? Be prepared to illustrate and back up what this EBITDA is. Negotiating the specific multiple will come in good time. Start thinking about what is? “your number” and be prepared to back up why.

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2.????? Have a solid Business Plan in place.? A plan that illustrates where you have been and where you are headed.? One that you would use to keep things rolling in a positive direction while looking for a buyer.? Keep the momentum positive. A solid sales and marketing plan with good historic data is a great tool both for running the day to day as well as sharing with a prospective buyer. Data is key! (i.e. size and complexity of your database, percentage of repeat clients, sales by product offerings, etc). Most buyers love data.

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3.????? Determine if you are going public or going to sell on the downlow.? Are you going to share with key employees and stakeholders within the company your intent to sell? Are you planning to go public and look for buyers openly in and outside the industry? Customers??

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4.????? Identify your target market: Determine who your ideal buyer is and what they are looking for in a travel business. There are several categories’ buyers might fall into and finding the right fit is key.? Considering early on who this night will help drive a go to market plan.? Some of the “players” that come to mind for me are (and what makes them different)

5.? Equity or Venture Capital Firms. These firms are looking for clear profits and a company they can grow quickly. It’s not a lifestyle gig, it’s a business to drive profits.

6. Employees.? Don’t overlook key employees that may be a good fit.? This is often a good answer for smaller lifestyle companies. It might take creative financing and an ongoing role as a mentor.

7. Competition or Industry Players. You might have a competitor that would love to have your market share.? Or perhaps an industry player that wants to open up an area that you have the expertise. Maybe they just want a quick way to boost staffing and bandwidth.

8. Lifestyle Buyers.? Yes they are still out there.? Perhaps it’s an avid cyclist looking for an opportunity to work in an industry that highlights his/her passions. Thnk about customers you might know well. These might be a bit harder to find, but with networking they are indeed out there.

?9. ?Clean up your operations: Make sure that your business is running smoothly and efficiently. How are your margins? Safety record? Reviews?? This will help you maximize your profits and make your business more attractive to potential buyers.

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6.?? Highlight a strong team: Ensure that you have a strong team in place that can help you run your business effectively (with or without you).? Have a solid org chart and key resumes in place and ready to share.

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7.?? Protect your intellectual property: Make sure that your trademarks, patents, and other intellectual property are protected. This is a good opportunity for a bit of housekeeping.?? Make sure you know what you have where.?

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8.?? Get your legal documents in order: Again, good chance to review and update key elements of running a business.? Ensure that all your legal documents are up-to-date and in order. Corporate minutes (the minutes we all overlook), Insurance policies clear and adequate.? Permits (transferable?) This will help you avoid any legal issues that could arise during the sale of your business.

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9.?? Prepare for due diligence: Be prepared to provide potential buyers with all the information they need to make an informed decision about your business. Being able to provide information in a timely manner will help you build trust with potential buyers and make your business more attractive to them.

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10.? Establish your Team.? Whether you elect to go it alone or hire a broker or consultant, know your team.? Who can you trust to share your thoughts with?? Who can help talk through issues or challenges? Who will challenge you?? Aligning your legal counsel and accountants early on can help make the right decisions when the time comes.

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Bonus. Be patient!? “Deals” take time and the right deal even longer.? There is no set timeline or structure.? Each “Deal” is different and can take on a bit of a life of its own, complete with its own challenges and opportunities.? Keep an open mind and be prepared to go with the flow.? Most of all “Good Luck”.

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