Tag Archives: Records

How Do You Prepare for Sale of the Company? Six Points

Situation: A company’s founder and CEO wants to sell the company. The company’s software is well-suited to current governmental priorities and should be of value to potential buyers. What are the best steps to take both to prepare for a sale and to sell at the highest price? How do you prepare for sale of the company?

Advice from the CEOs:

  • Add a person with connections to potential buyers to the board.
  • Look for an M&A specialist who knows the company’s market.
    • The right specialist will help validate the valuation of the company, review and identify potential purchasers, and make the inquiries that will lead to the sale of the company.
  • Investigate M&A cases in the industry and related technologies – both cases of firms like the company and cases of companies that may be suitors to determine their purchasing behavior.
    • This will help develop strategies to maximize the value of the company and the optimal bargaining position and will help prepare for negotiations.
  • Maximize the value of the company in preparation for the sale.
    • The fastest business growth may come from within the company’s current customer base – additional business customers where the company already has contacts.
    • Work up the food chain within existing customers to increase the company’s business within these companies.
  • Important preparations for a sale:
    • Assure that financial records are very clean. These are critical during the price-setting process and in negotiating the final price.
    • In computing company valuation, exclude the salaries of current principals to improve the income statement. These individuals will be replaced post-sale with lower-paid employees.
    • Continue to operate the company as though there will never be a sale. This maintains the value of the company regardless of what happens.
  • How open should be the company be – internally and externally – concerning a potential sale of the company.
    • Be as honest and open as is prudent. The biggest concern will be salespeople who may leave the company if they feel threatened by a sale, or who may stop selling because they do not want to try to explain the situation to prospects.
    • The other “at risk” group is developers, who may fear that they will be replaced or terminated following a sale and who may leave.

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How Do You Create HR Using Outside Resources? Four Thoughts

Situation: A company started small with everyone wearing many hats including the person in charge of HR. They wish to create a more formal HR structure with professional advice, but don’t yet want to hire a full-time HR professional. How do you create HR using outside resources?

Advice from the CEOs:

  • One company outsources their full HR function. Services include:
    • Putting records in order and maintaining them.
    • Developing different hiring packages for different levels of employees.
    • Recruiting.
    • Keeping the company and employees updated on compliance regulations.
    • Coordinating on-boarding and training.
  • There are several national HR and personnel outsourcing companies that can help. Examples include Paychex and ADT. There are also a large number of local providers. Network with your business peers or check out your local Chamber of Commerce to learn who these providers are.
  • What about training?
    • Outsourced HR professionals can organize training for formal certifications and some aspects of job skills training.
    • Training in company culture should be done by company leadership. Outsourced HR can organize schedules for this. The key point is that company leadership is the face of the company and the foundation of company culture. This can’t be effectively outsourced.
    • In some cases, training can be done via video. Outsourced HR can help to plan and coordinate creation of the videos, and can then schedule video training for new employees.
  • Have your in-house person join an HR roundtable to embellish their own training.

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