The sale process can often be stressful for business owners. It can be a distraction from the day to day running of the business and it may not always result in a successful outcome. Bracebridge Corporate Finance provides some simple, practical advice on how best to prepare for the sale of your business.
- Timing is everything
Why do you want to sell, what do you want to achieve from the sale and when do you want to sell – the timing of sale is critical to achieving the right value
- Plan for the sale in advance
It is never too early to start planning for the sale – there are always many improvements that can be made to a business to enhance value and make for a smoother sale process – and you never know when a buyer may approach you!
- Update your business plan
The strategic value of a business is determined by its current performance and its future potential in the hands of a buyer, not its historic performance – a 3 to 5 year rolling business plan will help you focus on those growth opportunities ahead of a sale
- Know the likely buyers
Thorough research, on a worldwide scale, to identify the buyers is critical. You should have a view on the likely buyers well before you start the sale process, as this will help you decide how to position your business in the eyes of the buyer. You want them to notice you before you approach them!
- Prepare high quality selling documents
Prepare concise, high quality selling materials such as an Information Memorandum that is used when first approaching buyers in order to articulate the opportunities for the buyer – first impressions count!
- Agree a timetable
Prepare a detailed timetable, setting out the key stages of the process and a target date for completion of the sale. Whilst there will always be a need for some flexibility, sticking to a timetable will minimise the disruption to the business and maintain momentum in the process
- Meet the buyers as soon as possible
Always try to meet the key decision makers from each of the potential buyers at an early stage in the process. There is no substitute for early face to face meetings.
Generate some healthy competitive tension between potential buyers and never accept the first offer. Negotiate the best price before you commit to a single buyer
- Don’t spring surprises on the buyer
Always be up front with the buyer. This will generate a level of trust between you and the buyer and avoid any last minute dealbreakers.
- Manage your wealth
The successful sale of your business is the reward for years of hard work. Invest the proceeds wisely and seek advice if necessary!