Okay. You’re ready. You’ve successfully built your media empire, maximizing every revenue opportunity and turned your niche publication(s) into a highly profitable multi-platform media company. Now you’re ready for the next step: sale!
Proceed with caution: The road to a successful sale can be a little bumpy.
So now what? Learn from the experts, of course! Bob Brady, Founder of Business & Legal Reports (BLR), and BLR CEO Dan Oswald, share their in-the-publishing-trenches expertise with us.
NMHQ: What are 3 smart steps niche publishers should take before they begin the selling process?
Brady and Oswald:
1) Make sure you’re really prepared to sell. Many niche publishers think they want to sell until they get far along in the process and they get cold feet. It’s hard to let go of your “baby,” so make sure you explore the emotional side of selling, not just the logical or financial. Sometimes the number of logical buyers are limited. You don’t want to have too many false starts with a limited audience.
2) Get your financials in order. Buyers want to see clean, accurate financials going back 3-5 years. Many will price your business based on a multiple of EBITDA, so if your financials show that number it will make things go better. Spend a little money to have a competent accountant help you put them in order.
3) Hire someone reputable to represent you. In the end, no matter how much you prepare yourself for the emotional side of selling, it’s going to be a tough process as buyers look for every flaw in your business. Having outside representation to shield you from some of this and to help you keep the process competitive is important. If you’d hire a realtor to sell your house, why wouldn’t you hire a representative to sell your business?
NMHQ: Can you share some insights on good ways to prepare your people for the transition?
Brady & Oswald:
Always advocate complete transparency. If you have a timeline for selling the business, then you can start to prepare people well in advance—even years. Let them know that your ultimate goal is to sell the business. It’s just part of realizing your investment. Take the mystery out of it for people. Reality is usually less frightening that what someone can imagine.
Depending on your situation, you may need them to stay with the business in order to realize the full value and making them feel like they’re part of the process goes a long way in making them comfortable with what’s happening. If you think key players might be a flight risk, you may want to consider incentives for them to stay through the process in the form of a stay or sale bonus.
NMHQ: Exit strategies don’t always go smoothly. What pitfalls should publishers avoid?
Brady & Oswald:
Working for a buyer isn’t nearly as good as working for yourself! Sellers need to really consider if they can and want to work for someone else. Often a buyer has a plan or vision for the business that is different than the seller’s, and that difference leads to hard feelings. Make sure you fully understand what you’re signing up for if you decide to stay around. Also, you need to realize that “your” employees now answer to someone else and it’s likely they’ll get on board with the buyer’s vision—even over yours! They must in order to succeed under the new ownership. It’s hard not to take this personally—even though it’s completely understandable.
Editor’s note: Bob Brady and Dan Oswald are part of the ‘Fab 4” line-up at the 2015 Niche CEO Summit in Chicago in July.
More about Bob & Dan: Business & Legal Reports’ Founder Bob Brady and CEO Dan Oswald are a dynamic duo of niche media mergers & acquisitions. The company’s product offerings include subscription web-sites, online training, newsletters, magazines, manuals, directories and databases, conferences, seminars, and virtual events.
About this blogger: Diana Landau is the Content Wrangler for Niche Media. A former sales director and corporate marketing hack, she has now found nirvana in writing and wrangling quality content. Diana is a food, wine, art and SF Giants enthusiast……who sometimes gets carried away.
Niche Media has created super niched-out events specifically for magazine publishers for over 12 years. We’ve helped pave the way for the era of boutique events that connect specific audiences and provide great educational, friendly and super-fun environments! Plus, Carl Landau – Niche Media’s Grand Poobah -also created a blog all about creating and marketing targeted events – blog.NicheEventNation.com Check it out!