Can I sell my company even if I have not made any profit the last couple of years?
The answer I give is a whole-hearted, "Yes!"
You can always sell your company. The correct question though is: Will you receive a value sufficient to satisfy your personal
objectives?
Many of my clients have become used to withdrawing capital from the company and once profits erode, become nervous and think that they need to sell before profits decline further. This is where valuation and sale of your business by a professional EMD or corporate finance expert will make a significant difference.
Although your historical EBITDA certainly is a factor, the value
will depend largely on what EBITDA you can prove for the future. If, for
example, you have landed large new contracts, you likely will be able to get
value for most of the EBITDA that those contracts will generate over the years to come.
I suppose the
tougher question here is: Why are you selling your company now? If you have no
choice, then you should prepare the best you can, potentially hire a broker or Exempt Market Dealer to
help you tell the story, and get the best value possible.
If you don’t have to
sell now and you think the future looks better, you likely will get more value
if you wait. Taking on 30% sale to Private Equity would be your best option. They will fill up the tank again, revitalize your strategy and get you looking at what options you have - most often, hiring a CEO and encouraging you to do the work you love to do.
Jacoline
began her career with Granduc Mines, Northern BC, and then Deloitte in their
strategy unit. She
developed a strategic planning model and published it in a book called "The Power of Strategy”. She also wrote
"Business e-Volution" and “Money Magnet: How to Attract Investors to
Your Business” (Wiley), which has been used by Ivey as a text book.
She is a Director on the Board of
the Exempt Market Dealers Association (EMDA) responsible for brand and
communications. She is on the advisory board of DCL International, Bilingo
China and Flint Business Acceleration. She has been a Director for other Boards
such as the Strategic Leadership Forum.
She is a regular panellist on
BNN: The Pitch, a contributor to the
Globe & Mail and National Post, serves as a judge for the UBC and the
Richard Ivey School of Business’ Business Plan Competitions and is a guest
lecturer at Ivey and Rotman Universities. Jacoline
holds an arts degree in Industrial Relations from McGill University and a MBA
from the University of the Witwatersrand.
Her MBA thesis was selected by Cambridge University and published by
Cambridge’s Engineering faculty.
