The M&A Brief: 8 crucial steps to selling a small event business – Exhibition News

By Stephanie Selesnick

Selling your event business can be challenging, but with the right approach, your chances of success increase dramatically. Follow these proven tips to improve your chances of selling.

1. Have your data, financials and documentation ready before you go “to market”

With your legal documentation and financial information in order, and attendee and sponsor/exhibitor database organised, it will save time and aggravation once your business is up for sale. Having clean and organised financials that can be understood easily by others and a unified database is a must as you will be asked to provide these things (and more during due diligence!) to buyers.

Some items we suggest you have:

• The last three years of federal tax returns for the business being sold
• The last three years of financials (profit & loss statements, balance sheets) , including owner and one-time expenses identified
• Sales data for past three years at least (to identify trends, bright spots and growth opportunities)
• Database counts for sponsors/exhibitors and attendees
• Current office space lease(s)
• Vendor and venue contracts
• Ownership structure
• Current organisational chart

And more!

2. Have a professional business valuation performed

Having a professional valuation done is well worth the expense and will be utilised by many parties during the selling process. GMA offers a free initial assessment for potential clients that will help you have a better indication of what your business is worth.

3. Hire an M&A advisor

Just as a doctor shouldn’t perform surgery on herself, you shouldn’t sell your event business on your own. A sale is emotional for owners. It’s something you’ve built and lived day-in and day-out. Advisors are professionals who owners hire to look after their best interests and shepherd the entire sales process. Don’t skimp.

Not only will an M&A advisor help you prepare for the sales process, they will leverage relationships in the industry and help you negotiate with buyers based on their experience working on similar deals. Oftentimes, an advisor can flag issues and help organise information in a more polished and understandable manner.

4. Collaborate with your advisor to write an overview of the business

Buyers want to know details about your business. The overview (often called an Information Memo) should include a history of the business, financials, employees, important attributes about the exhibition and industry (where it’s held, number of exhibitors/sponsors and visitors for the last 3 years, etc.), the expo’s position in the marketplace with an analysis of any competition, recommendations to expand the business once sold, and much more. It’s of utmost importance to accurately define the value proposition, identify bright spots in the business by delving into the sales data and show buyers a clear path to growth. Your M&A advisor can help with this.

5. Share information with buyers while protecting your business

All potential business buyers should sign a Non-Disclosure Agreement (NDA) before giving out any information. Buyers normally have additional questions about the business based on the initial information provided. Your advisor can help you figure out what information is reasonable to provide and at each specific stage of the sales process. Coordinating the process around upcoming event dates is a good idea, as most interested buyers would also want to attend the event if possible.

6. Keep the work going while negotiating

In the midst of negotiations, remember you must keep the business going – and some would argue – thriving! Whether you have just begun the process, or are in the final stages of a deal – remember, the show must go on. Your advisor can help identify specific resources and employees to help handle the extra workload during this process.

7. Due diligence will not last forever, though it may feel like it

A buyer who commits to buying the business will often request comprehensive information about the business and expect answers to long lists of questions. Being organised ahead of the sale will help tremendously during the due diligence process. Requested information usually includes information on clients, financials and legal paperwork. While this process is tedious, remember it is the last step before the pay off!

8. Keep a positive attitude

Keep calm and have a positive attitude. Remember, you are familiar with your business, but it will take a lot of information for buyers to understand it as well as you do. Temporary setbacks are part of the process. By following the above steps, you’ll be in a much better position to succeed.

Updated from Selling A Small Business – 12 Crucial Steps, by Peter Siegel, MBA

Grimes, McGovern & Associates is a leading lower middle-market Mergers & Acquisitions firm advising media, events, and information services businesses globally. See our transactions here.

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