Middle-market aerospace and defense business owners are typically very busy individuals. If the owner is also still the main leader of the company, adding the workload of a sale process to their schedule is difficult. Having a strong team around you (professionals and your trusted employees) can aid in dividing the sale process workload, but the main decision-making still falls on the owner.
In the late 1800s/early 1900s, Italian economist Vilfredo Pareto observed that roughly 80% of Italy’s land and wealth was owned by 20% of the population. Then in the 1940s, this observation was popularized by a management consultant, Dr. Joseph M. Juran, in which he observed that 80% of peas came from 20% of pods. What does Italian wealth and pea production have to do with managing a sale process?
Everything.
Owners should prioritize their decision-making in a sale process just like they do with their everyday business: focus on the impactful decisions that have the greatest “outcome.” “80% of results often come from 20% of efforts” – the Pareto Principle.
A potential buyer during due diligence will spend most of their time and focus on a select number of high potential “outcome” areas. An “outcome” the potential buyer may be trying to achieve is a reduction in the purchase price. When getting your business ready for sale, focus on the high potential outcome areas. These areas vary from business to business, but we talk about many of these in our weekly Deal Notes®. Having an expert advisor team and internal business team supporting you is the best way to be able to identify these potential issue areas and address them before going into the market.
Have a great day everyone,
Ryan Kirby
Junior Partner
