Archive for December, 2008

It’s tempting to allow the current economic storm to distract us from focusing on essential matters a bit closer to home. Since most of us don’t have the knowledge or resources to directly impact the capital or credit markets, it’s important to pay attention to what we can make an impact on. We can influence our immediate environment and, in particular, the businesses that we own or are charged with managing. Given the current situation, it is time to focus on those business issues that directly affect a company’s ability to shore up cash, such as:

• Backstop Liquidty
• Working Capital
• The Company’s economic drivers and business metrics

Many business owners think constantly about a highly anticipated future “liquidity event,” where they sell their business and ride off into the sunset to a life of leisure and financial security.

Building a business and selling it for a hefty premium is a worthwhile goal. And those dreams may be fevered these days, with potential tax code changes looming and lingering economic malaise.

But it is one thing to contemplate selling a business at some distant time and quite another to take the steps for ensuring its house is in order. By doing this, management can increase the odds of closing a deal if and when an interested buyer appears.

The time to do this is well before an anticipated sale, rather than when owners have decided they are ready to begin the sales process. Even if a business appears to be performing very well, one can jeopardize a potential sale by neglecting these issues.

Read the rest at the Austin Business Journal

From time to time I will be putting my thoughts on paper (as it were), discussing issues relevant to owners and managers of middle market companies.  The focus will be on relevant strategy, finance and operational issues.  I look forward to hearing your comments and thoughts as well!