It can take up to 18 to 24 months to transact a divestiture. Poor preparation and planning, followed by subjective rather than objective valuations, are the main contributors to this long time cycle, causing deals to unravel during negotiations.

Confidence is contagious - so is a lack of confidence.

                                                          - Vince Lombardi

The word confidence has been used a great deal lately in talking about our economy. The discussion about confidence is healthy as it is the true platform from which businesses move ahead. All business leaders understand that strong belief and commitment reinforces the right attitude driving confidence. When you get right down to it, confidence is about attitude. A high level of confidence backed with the right attitude generates results and creates business value.

A recent study of M&A Advisors by John Warrilow, undertaken August 1-2, 2011, revealed five key attributes that professional dealmakers believe make a company saleable and enhance its value.

A total of seventy seven intermediaries completed the survey. Of the participants, the broad range of intermediary client size focus included main street brokers who specialize in selling very small businesses, going right up to mid market mergers and acquisitions professionals with an average deal size of one hundred million dollars or more. Interestingly though, although the range of participant focus was broad, the consensus remained the same regardless of the size of the transaction.

Unfortunately, most business owners lock the doors of their plant or office every night, but forget to take even simple steps to protect this important asset. In this article, we explore at a very high level, how to keep and retain your key employees before and during an ownership transition.

PART 3 - Contemplating a Sale or Merger? What are some additional issues to consider?

In this third and last installment of our series (click here for part 1 or part 2) on why and how to hire an investment banker, we will take a look at some additional issues you may wish to take into consideration.

1) Experience in presenting your company. One of the classic mistakes that sellers make is simply responding to inquiries by suitors.

PART 2 - What to consider when determining the value of an M&A Advisor. Is it worth the fee?

Every skill we master involves a learning curve - from driving a car, or attempting athletic endeavors, to completing business transactions with myriad accounting, strategic and legal complexities. Most people would agree that practice improves our performance. Taking this into account, when you think about selling your business do you really want to handle such an important financial transaction without the experience of handling other similar transactions?

Very basic, but important issues to consider when a business owner is contemplating an exit event. 

PART 1 - How much is my business worth, and why does the structure of the transaction matter?

Ever wonder to yourself, "Why hire an outsider to sell my business when I have grown it and know it better than anyone else?" Fair question.  Given the often towering obstacles CEOs and owners have overcome in building up a business, and bringing it to the point where it becomes attractive to a strategic or financial acquirer, that confidence is understandable.  Some CEOs and Owners think M&A is a do it yourself type of transaction.  However, the skills and expertise gained from growing a company are not necessarily automatic qualifiers to handling the single largest financial transaction of your life. 

In his widely read annual letter to shareholders, Warren Buffett often includes a few folksy comments that provide pearls of wisdom and common sense for all of us.  One of my favorite pearls is  - "It's only when the tide goes out that you learn who's been swimming naked."

Below are a few pearls of wisdom for entrepreneurs (and all of us) that appear in Mr. Buffett's 2009 annual letter to Berkshire Hathaway's shareholders.

There are 54 factors that affect the value of any closely-held business. Below is a list of the top 10 factors that sophisticated buyers look at when determining the price to pay for a business.  They are not listed in order of importance, but taken together, these factors directly impact the value of any business.

Can you handle the truth? Of course you can - if you really want to sell your business!

I'm still amazed at how many business owners do not understand the importance of knowing the "realistic" value of their business before they decide to sell their company. In this "breakthrough business strategy," my goal is to help you understand how going to market with a realistic price and realistic expectations is essential to your transition success.