Rod Drury: How to start a business – Part Six

This one is the last in this brillant series and is my personal favourite. It focuses on the other end of a business’s life, its sale.

NZHerald article

Like the other articles it has pointed out some very eye opening insights, i.e. the ones you normally learn from experiencing. I believe this is the best form of business education i.e. case study based / learngin from examples. Well its how I’ve learnt what I know about business enterprise today.

His opening statment is one that sparks a ‘brainfart’ in my head – Selling and then moving on to start a bigger and better enterprise. Hence the selling of a company to and overseas giant is not a bad thing. It acutally creates individuals who now have the experience AND MONEY to re-invest into NZ’s enconomy , most likely larger form as well. Typical examples – 42 Below-Becardi-Geoff Ross, Trademe-FairFax-Sam Morgan. Its just a matter of time before these boys develop their next success.

This article was great at pointing out some hidden realities- My favourite – how the selling of your business can actaully put it at gave risk. Specifically the access to your business’s secretes/IP, your competitiors can obtain. Secondly the effect of this ‘ selling activity/ behaviour’ in the workplace can have on your staff, creating a mood’ of insecruity.

The acutal process of the deal is also very strategic and Rod suggests a model that “bakes certainty into the deal right at the beginning” i.e. Provide all key infromation to the purchaser, get them to make an binding unconditional offer including all terms and warrants (they will find out nothing that will impact the value of their offer), give them a fix time to undertake their due diligence. After this time they should be 100% committed.It is this type of insight that highlights the need for an experienced mentor and/or advisroy board.

A final point was made about the exiting of the founders. It is typical to have a phase out period of 1-3 months to ensure a smooth transition. It also may involved appointing new staff to cover the loss.

Great series of articles – hope there’s more where they came from.


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