For some WordPress business owners, selling the company and getting acquired sounds like a pipe dream: More resources to put toward your product. More money for marketing efforts. More opportunities to grow your team. Where do you sign up?!
But just as software companies (including StellarWP) are selective about the brands they acquire, WordPress plugin owners should be choosy before moving forward with a sale. Don’t just say “yes” to the first or highest offer — here are a few questions to ask yourself to make sure you’re ready to take the plunge and to ensure you’ve found the right match.
1. Are your books clean?
Have you separated your business finances from your personal finances? If not, run — don’t walk — to the bank and straighten out your books with separate business accounts.
You’ll be a more attractive candidate for a sale if you break down your revenue by product line. Spell out which of your products or plugins makes the most money; see if you can point to any sales trends over time.
Gaining a solid grip on your business’s numbers will not only make you a more compelling prospect for acquisition, but it will also help you manage your business more strategically.
2. Do you understand the acquiring company’s goals?
It’s easy to daydream about what an acquisition might mean for your small business, but you need to go in with eyes wide open and a thorough understanding of the acquiring company’s goals and expectations.
If you’re selling a WordPress plugin, the purchasing company might be interested in one or more of these aspects of your business:
- Your customer base, especially if there’s overlap between your customers and the customers the purchasing company wants to reach.
- Your employees’ knowledge and expertise. Is your plugin known for its top-notch support team or best-in-class developers? This specialized expertise could be appealing to the purchasing company.
- The product itself. Does your product offer special features that the acquiring company needs for its own business? It might be easier and more efficient for them to scoop up your company than to build something new from scratch.
- Other times, purchasing companies aren’t trying to meet a need of their own, but they see your company as a growth opportunity and an investment. By bolstering your brand, they expect to build their own.
Ask the acquiring company what attracted them to your business. What do they hope to accomplish through this sale? And what does that mean for your brand?
For example, will your product stay in the market? Or will your features and services be tucked into the acquiring company’s offerings? The answer can help you decide if this sale is right for your business.
3. Do your values align with the purchasing company?
After you sell your business, you’ll be folded into a larger organization with its own values and culture. It’s important to make sure you really understand those values before you move ahead.
Ask questions about the company’s vision, mission, and culture. How does the leadership team live out the company’s values? How do they keep employees engaged and rewarded for good work? Get to know the people behind the organization. Don’t just rely on the boilerplate copy from the website to give you a picture of what a company culture is like.
4. What will the move mean for your team?
Would everybody come along, or would you be expected to consolidate and reduce headcount?
It’s fairly common for companies to acquire a business and split up the original team (although at StellarWP, we’re committed to purchasing WordPress businesses and keeping their teams together, so every software company is different).
Make sure you clarify the expectations. After all, acquisitions come down to more than money; it’s crucial to understand what the move would mean for the people who make up the heart and soul of your company.
5. Are you ready to have a boss?
After years of running your own business, it can be uncomfortable to start reporting to a boss within a corporate structure. And it’s not just about power dynamics: You’ll likely spend more time poring over data to monitor your business and make sure it’s meeting certain goals and benchmarks.
In some cases, founders exit after selling a business. But if you intend to stick with your company after the transition, work collaboratively with the purchasing company to create a job description with expectations that you both agree on.
6. Have you talked to other business owners who have been in your shoes?
Selling your business can be both exciting and intimidating, but you can put your mind at ease by talking to other founders and owners who have been through it already. Ask about their experiences: What do they wish they knew beforehand? Is there anything they would do differently?
More helpful resources
If you’re curious about what acquisition is like at StellarWP, read our Q&A with iThemes General Manager Matt Danner for his honest reflections on the experience.
Michelle Frechette, director of customer success at GiveWP, also wrote about her experience as an employee during the GiveWP acquisition over at Post Status.