Jackie Gallant admits she got lucky. About a year ago a large Germany company called IDT Biologika approached her out of the blue about buying her business. Gallant started Gallant Custom Laboratories in Cambridge, Ont. some 20 years ago. Over the years, she created a niche market in which she was the only player in Canada. She hadn’t given a great deal of thought to selling her business. While other potential buyers had made inquiries over the years, none of those deals had worked out.
But Gallant was approaching her sixties and she had no family members interested in taking over the business. So while she wasn’t focused on her exit, in the back of her mind she was getting things in order. “I knew I would have to do something sooner or later, but I didn’t think it would happen for a couple more years,” she told me. “I wasn’t actively looking, it just kind of fell into place. ” IDT Biologika weren’t on her radar at all as a buyer. She had never heard of them before, and it wouldn’t have occurred to her to look to Germany for a buyer.
Lucky for her, the two companies had a mutual acquaintance. The leaders met, talked and then began to discuss plans in earnest. But it didn’t happen overnight. It took another 12 months to work out the deal, and Gallant still isn’t finished with her company. She is staying on as president for a couple years at the request of the buyers, and the final deal is dependent on the company’s performance. She’ll also sit on the IDT scientific board of advisors.
Why would a German company be interested in her small business? Gallant has a solid reputation, a lock on the market and a list of customers. She can be the new parent company’s conduit to the Canadian marketplace for additional products and services that they provide. She knows the market, the industry and the needs of her customers.
IDT Biologika also has deeper pockets to be able to grow and expand the work she is doing. It seems counter-intuitive to have a unique niche with no competitors but still find someone interested in your business. But it worked for Gallant. Here’s what she did right and what you can learn from her story:
• Know your specialty. Understand what sets you apart and then capitalize on it.
• Know your stuff. Be the best at what you do.
• Know your numbers. Due diligence will weed you out if you aren’t able to answer their questions with confidence.
• Begin preparing well in advance. You never know when or where the offer will come from.
• Be prepared to stay on for a couple years during transition. That’s the buyer’s insurance that the company won’t fail as soon as you leave.
• Get the word out to people who are connected. They may refer you to your buyer.
“What’s really key is, do it before you need to,” says Gallant. “That gives you the opportunity to walk away if it doesn’t work. I didn’t have to, and it was earlier than I planned, but it was a good opportunity and I took it. That’s key to get what you want.”
Gallant’s final word: “Be clear on what you want.” So true—if you don’t know where you’re going you could end up somewhere else. When selling your business the stakes are high. Emotions run strong. You may be tempted to go down a path that doesn’t fit your plan. For example, if you don’t want to stay on at the company, be clear about that. Make sure the company can run without you. Be prepared to say no and maybe take a lower offer if that’s one of their conditions. You’re unlikely to have that confident stance if you haven’t given it serious thought in advance.
Jackie Gallant got lucky, at least in part. If you believe you’ll have similar luck, you might be right. But I wouldn’t bet the company and your comfortable retirement on it.
Do what you need to do to keep your options open and yourself prepared. Then, if you do get lucky, you’ll be ready. And if no offer materializes, you’ll have the foundation of a plan to make your own luck—like you’ve been doing most of your working life.
Wayne Vanwyck is the founder and CEO of The Achievement Centre International in London, Ont. He is the creator of The Business Transition Coach Forum and the author of the best-selling books, Pure Selling and The Business Transition Crisis. He has been training and coaching business owners for the past 30 years.
MORE EXIT INSIGHTS:
- Why You Should Always Be Ready to Sell Your Business »
- Exit Tips from an Entrepreneur Who Sold His Business—Twice »
- Hard-Earned Advice on Securing a Successful Exit »
- How the Sale of a Business Can Go Off the Rails »
- The Smartest Thing To Do When Selling Your Business »
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