Based on over 200 deals and 30 years experience, this countdown of articles crystallises the complex transaction of selling your business into ten golden rules. You will only sell your business once and have one chance to get it right!
GET SOME HELP
Selling your business will be one of your most important financial (and potentially life-changing) transactions, yet it is unlikely that you will have any experience of how to do this and how to maximise value. On the other hand, it is highly likely that the buyer will be very experienced and streetwise
The process will, therefore, be unfamiliar and can appear complex, intimidating and time-consuming as well as potentially being a prolonged emotional roller-coaster. It is common to underestimate what is involved and in most cases, the performance of the business deteriorates through the sale process, exactly the trading period which comes under a disproportionate level of scrutiny through due diligence
That is why you should get some help…as long as it is the right help!
Selling your business is so important that you should take the time to assemble the right team around you as early as possible to deliver the best possible outcome and minimise risk
That help should provide you with the emotional distance and objectivity to secure the best possible outcome. It also provides expertise and experience to help achieve your goals so you can focus on running the business
At a personal level, we would suggest informal input from close trusted family and friends who know you – ideally someone who has been through the process themselves
In terms of formally appointed advisers, you would typically need a corporate finance adviser, lawyer and tax specialist
Your corporate finance adviser will work closely with you and under your control to help deliver the best possible outcome with the minimum disruption and damage to the business. In practical terms, this will involve helping formulate your exit strategy, ensuring you understand all the available options, getting the business ready for sale, preparing an information memorandum, identifying and approaching suitable buyers or funders, securing and negotiating offers and project managing the process through to completion including liaising with all other advisers
Your corporate finance adviser will also act as a “buffer” to protect relationships and is often in a better position to say things that a seller cannot
Your lawyer will document the transaction and ensure you are protected as far as possible from any future claims and your tax adviser will ensure that any transaction is as tax efficient as possible – both key and valuable roles
You should be wary of “doing it yourself”, even if you have been approached or even already had an indicative offer, please do not leave yourself exposed to clever tactics or wording from experienced and streetwise buyers
Costs can sometimes appear daunting but please keep in mind the potential added value involved and risk reduction and also that most corporate finance fees are only payable if and when the deal completes
Not all advisers are the same so be careful to select the best one for you – recommendations and references from previous clients are invaluable
Selling your business is simply so important that you should take the time to assemble the right team around you as soon as possible to deliver the best possible outcome and minimise risk