And you thought the decision to open a business was difficult?
While many believe that selling a company is an even more difficult decision, it doesn’t have to be. In fact, it can be a very rewarding one that creates great value or opportunity for a fashion business owner.
1. START PLANNING BEFORE YOU OPEN FOR BUSINESS
Know this: the fashion M&A industry is very robust one today. Apparel and accessory companies of all shapes and sizes, and all across the globe are looking to buy, sell, or merge with other fashion or related businesses.
For this reason, a smart business owner should enter into its market prepared for the possibility of acquiring another company or building a brand that can then be sold.
Failing to plan an exit strategy is a common one. After all, how many people go into business planning to get out of one? (In truth, there are people who build businesses with that exact plan in mind — create value and sell at a large profit).
Similar to buying a stock, it pays to have an idea as to when you will sell, or how you move towards building a brand that is at least “sale-able” so that you have options available to you as you build your business.
2. CONSULT AN EXPERT …IN YOUR NICHE!
Selling a restaurant is a different animal than selling a fashion company. As you research options for selling or merging your company, look for experts who have experience in your particular field.
Their understanding of the current industry outlook and how to facilitate valuing your business (and building value) can have a substantial effect on the final deal value. Moreover, a fashion M&A advisor’s contact base with fashion companies, bankers and investors interested in the fashion and accessory niche, and other industry professionals can be a great asset that non-specialized M&A companies cannot offer.
“This is a highly active period for fashion M&A, with many businesses looking for strategic partners and others seeking acquisitions at rational prices,” notes Jack Hendler, President of Net Worth Solutions, Inc, a New York-based M&A advisory services firm. “There is a great deal of potential in the current market, but companies need all the information they can gather to make insightful decisions that will enhance their long-term profitability.”
3. TIMING IS EVERYTHING, SO BE PREPARED
An ancient proverb says, “All roads lead to Rome,” meaning all paths or activities lead to the center of things. If you plan ahead from the start, the decision to sell your company will be easier because the process will not be foreign to you. This hold especially true if you are entering into a business with partners, an even more when those partners are close friends or family.
While it’s impossible to define a perfect time to sell your fashion business — since it does depend on economic and personal factor — knowing your options and having an understanding of what drives the fashion M&A market, will reduce surprises, simplify the process of finding a target, and creating overall great value.