7 Things You Didn’t Expect When Selling Your Software Company

Contribution by AceTech Ontario CEO Member Mark Miller of Volaris Group.

You have worked hard to grow and develop your software company. Perhaps your success has attracted some attention; or maybe you are feeling that it’s time to move on. One way or the other, selling is on your radar.

Of course, you’re ready for this next step.

But there are several things you probably didn’t expect – unforeseen factors that could affect you and the acquisition process.

1. Potential Buyers Generally do their Due Diligence

Initially, it felt like you were close to a deal. But the due diligence process is taking longer than anticipated.

Due diligence is more than just opening the company’s books – it’s about determining if your company is the right fit for the buyer. They will look at your operations, structure, and any legal considerations in addition to your financials.

Be prepared for a lengthy due diligence process.

People want certainty. It’s not uncommon for them to make a series of requests before feeling confident.

2. It Will Take a Lot of Hard Work – More Than You Expected

It has taken serious sacrifice –the building, planning, delivering results – to get to this point.

So now you can just sign the papers and relax, right? Not really. Selling the business involves hard work from both parties. Enter the process with this in mind and clear the decks for some serious work ahead.

Your emotional reaction may also come as a surprise. For so long you’ve thought about the end-game, you just assumed you would enjoy the process.

Go easy on yourself – it’s natural to have mixed emotions about giving up your work.

3. The Process Will Take Longer Than You Expect

The process usually begins with the initial discussions followed by the valuations, due diligence, further discussions, proposals, counter-proposals, financial review and payment schedules – all moving toward the final sale.

This process cannot be completed in a single phone call.

Be prepared to work through a lengthy process and continue delivering results along the way.

4. There Will be Fear in the Workplace

Don’t assume that just because you haven’t made a formal announcement, your employees don’t sense that something is happening. Employees can be highly skilled at detecting potential changes within their workplace.

Staff anxiety may hurt productivity or stir rumours that hurt your competitiveness. Always maintain a calming presence.

During this transition, your leadership is more important than ever.

5. You Can’t Take Your Eye Off the Ball

Your core business has been your key to growth, and continued performance has made people interested in your company.

Now that a sale is under discussion, that performance must continue.

A drop in performance could derail the entire process, so don’t get distracted by the negotiations.

6. Buyers Will Be Skeptical of Your Numbers

You have an idea of how your company should be valued, but your buyers may see things differently. That’s a natural part of business.

Don’t be discouraged by their skepticism. If your numbers are realistic and accurate, then the proper deal will present itself.

7. You May Have Seller’s Remorse

When the sale is done, you may feel a twinge of doubt. That’s normal.

It’s important to remember that the sale was your end-game all along.

When the opportunity presented, you were ready, and you made sure your company was properly valued.

It may be hard to give up control, but in time you will know that you did the right thing.

Your Turn

Are you preparing to sell your software company? Have you encountered challenges along the way that you didn’t anticipate? What lessons have you learned? Share your thoughts and questions in the comment section below, and don’t forget to share this post if you found it useful.

                                                                                                                                                                             

Mark Miller is the CEO of Volaris Group. He specializes in global vertical technology and has an interest in organic growth, talent management, sharing best practices, and building efficiency for the businesses he works with on a daily basis.

Volaris is a global company that has customers and staff all over the world providing mission critical software and hardware that helps run better businesses. To learn more about Volaris, visit our website at: http://www.volarisgroup.com/

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Challenges of Operating in Multiple Countries

Contribution by AceTech Ontario CEO Member Mark Miller of Volaris Group

AAEAAQAAAAAAAAfBAAAAJGQ3NDkxMzU1LTVlMDQtNDdhZi1hNmMzLTkxOTkxY2Q4ZmVmNAEither through acquisitions or expansions your company has gone global. You now have opportunities in additional markets, but also face a new set of challenges.

These challenges may be cultural challenges, such as adapting to a wide range of business environments, and operational challenges, such as setting up lines of communication which allow your company to function as a global company, rather than just a company that happens to have a lot of offices in different locations.

Some of the common challenges that companies face when establishing a global footing are as follows:

Human Resources and Talent Management

Companies need to focus on having the right people in the right place when executing a global strategy; as human capital is at the core of driving a successful global business. This requires providing ongoing coaching to your executives and leaders, so they can adapt to the different cultural environments, while working on their business management and leadership skills.

At Volaris, we recognize that cultivating the next generation of leaders is essential to continued growth and sustainability. Hence, we encourage our leaders to develop a long term perspective, and provide them with the autonomy to make decisions, in order to meet a clear set of goals and objectives in those global markets.

We also empower our leaders with the necessary tools to succeed in a global environment, through regular performance reviews, mentoring, and corporate summits. This helps keep our teams motivated, attracts better employees, engages our customers, and helps our leaders manage growth more effectively.

Catering to Different Markets

It is crucial to understand what works in your domestic market might not work in other countries around the globe. Thus, when expanding into a global market, your company needs to be conscious about the perceptions, needs, preferences, and other attributes that affect the decision making process of the customers in that market in order to customize your solutions.

The same concept applies to the products that you offer in those global markets. Some products might qualify as global products when they solve a common problem for all your international markets. However, forcing customers in a new market to adjust to all your domestic products might not be well received. Therefore, you need to conduct a thorough market analysis to deliver localized products and develop processes that satisfy your customer’s needs.

You also need to consider tailoring your marketing efforts to match the new market’s preferences. For example; adjusting your brand positioning, translating your marketing materials and corporate website, customizing your sales cycle, and evaluating your digital marketing and communications strategy.

Communication

Having your operations spread out across multiple countries and time zones can make it tricky to communicate. This also slows down the decision making process as there are only a few hours a day of common “awake” time.

At Volaris, we encourage our leaders to regularly use the company intranet site as a tool to collaborate with peers across multiple businesses, regions and countries electronically. Many of the academies we have put together in the past have proved to be an effective method to
share best practices, and allow our businesses to collaborate with each other while understanding each other’s goals.

We also host quarterly corporate summits with general managers and leaders from all over the globe, as we firmly believe that these summits play a crucial role in bringing people together; in order for them to learn, share, and grow.

Global companies must continually work on creating opportunities such as these, which encourage a face-to-face interaction between their teams, as this can definitely help boost team morale and increase collaboration.

Remember

Depending on which industry you are in, you will face additional challenges that could affect the way you run your business in those global markets. It’s always important to conduct a thorough research on your competition, legal regulations, and other factors relevant to your industry, prior to making the big move.

Global Expansion Key for Canadian Tech Businesses

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Yes, we’re Canadian. And as Canadians we’re sometimes mired by the stigma of being lesser than our American counterparts. But there’s one thing we probably know a little better, or at least have more experience in and that’s expanding our businesses internationally.

The United States is a humongous market and American companies can easily pick away at a very ripe consumer base. If all goes well, there’s no pressure to necessarily step outside of the comfort zone. Get in, stay put and watch the numbers rise exponentially. 

But by necessity, Canadian business leaders often need to expand beyond their boarders to scale past an intermediate level of business. This reality has made north countrymen (and woman) extremely well-versed in the processes of expanding in global markets.

Skura President Jeff Wessenger recalls this very process, one of which can be attributed to Skura’s rising success over the better part of a decade. 

“I call it a ten-year overnight success,” said Wessenger. We did have a head start because we had a background in services, which definitely helped a lot. We took a lot of existing relationships and leveraged them, transferring existing services agreements into a software and licensing relationship.” 

“The idea that we created a product and took it to market and had success in 78 markets, it didn’t happen that way,” he said.  

Humble as he may be, the process of expanding is not just a matter of packing up your product and throwing it across the ocean. There are many things to consider; taxes, exchange rates and culture to name a few. Skura can shamelessly give themselves a pat on the back, nearly 80 countries is no easy feat.

Tips For Global Expansion

Leverage Relationships and Win Those First Customers

Starting as a modest service company, Skura adjusted their strategy in 2006 and dove into the world of “sales enablement”. Today the company offers a software that collects sales data and allows outside sales reps to carry that information on the run. New data can be implemented remotely and everything added goes directly back to head office. It didn’t take long for the software to spread said Wessenger, but he notes Skura may have been working with an advantage in terms of expansion. 

“I think we had relationships previously built through the services company and it was through those relationships that we were able to bring on our first global customers and develop that enterprise reference and reputation,” he said. 

“Typically customers one through ten are the toughest to win and we won those almost immediately. Once you have those references, your go-to-market strategy is a lot easier than starting from nothing.” 

A big part in global expansion, Wessenger notes, is continual growth and considering the impact of new ideas. So with that in mind…

What’s Next?

“We want to expand beyond the current vertical, we have a pretty good presence in life sciences, but the solution we built is by no means specific to that vertical, there’s a much broader market out there.” 

“It’s really a sales and marketing pivot, we need find a way to win those customers in the financial industry, how can we win customers in manufacturing market? That’s a deliberate plan we’ve started on this current year. It’s been fairly successful, we’ve brought on some pretty big customers.” 

“We’re really trying to tackle the virtual customer from a product standpoint and helping inside sales reps.”