We are all told as business owners and entrepreneurs to plan for an exit strategy often years before there is an exit. It would be nice to believe that we have total control over timing in many of life’s decisions, but as my husband says, when it comes to timing there are 3 possible scenarios - too early, right on time, or too late. So, you do the best you can to be “right on time” while understanding that this is an elusive goal.
I wanted to share with you our experience in selling our business - KIALOA Paddles. We had an exit date planned for the end of 2020. In early 2018, we had some interested parties sniffing around. At the time I had a mentor who was in mergers and acquisitions and I knew the economy was good. I called him and told him about the unsolicited interest that had been showing up. We discussed the state of the economy and where we thought it was going, we discussed opportunities and threats, and the fact that just because your plan says you are selling at the end of 2020, does not mean there is a buyer who wants to buy at that same time.
I remember asking him, “Seems to me when people are expressing interest you better listen even if it’s not exactly what you had planned, right?” The answer was a solid and resounding yes. From there we began the process of strategically approaching potential buyers and identifying who we thought would see buying KIALOA as beneficial to them and who had the highest potential to be successful with the brand.
We were extremely fortunate to have to have been able to sell KIALOA Paddles to Werner Paddles, a larger family-owned paddle company who shared our values around product quality and customer service. We were lucky to have found partners that valued our brand and had the best ability of any company out there to be successful. And we were lucky to have found new owners who we liked and enjoyed working with throughout the transition.
In hindsight, if we had said, “Not now,” back in 2018 things today would be quite different and we likely would not have a buyer who was interested. The COVID pandemic shut down team paddle sports including outrigger and dragon boat paddling, a large part of KIALOA’s product offering. Though SUP is going strong, taking the hit of the closure of team paddle sports greatly affected the value of the business short term. So we would have been sitting here at the end of 2020 saying,” wow, guess we can’t sell now.”
The lesson here, have an exit strategy but be flexible, listen, investigate on both a business and personal level, and be prepared to sell your company maybe before or maybe after you had actually planned to.
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