Posted: 12.03.2020

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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!




Depending on your objectives, there might be a variety of options open to you to achieve those aims – do not be blinkered or immediately dismissive and keep an open mind

It is important to very clearly understand those options and their implications – the “art of the possible” in the context of your particular circumstances

Trade sale

An outright sale is clearly the most common first thought of business owners and for many is the right route – the most common exit route, crystallising your value in a single transaction. This is only one of a number of options that might meet your objectives

Whilst the key advantage should be maximised value, the business will be impacted by the process and a failed process will be damaging

do not be blinkered or immediately dismissive and keep an open mind

Private equity

This route can represent an ideal opportunity to cash out a proportion of your shareholding, continue to share in the upside potential of the business you have built and secure the funding support to enable the realisation of that full potential

Do not be put off by any perceived “pub talk” views on private equity which can often be negative and make your own independent and informed assessment – although counter-intuitive, private equity pricing can sometimes be more attractive than trade buyers partly driven by having large amounts of cash available to invest

Other than money alone, the right private equity partner will provide a “sounding board”, advice, disciplines and contacts, all from a party with aligned goals and vested interests

Your options should not be restricted to the traditional institutional private equity firms but include family offices and ultra-high net worth individuals/networks


Passing the business on to your management team is attractive to some business owners and there are a myriad of potential structures available

The basic principle, however, is that your MBO team can only pay what they can raise – in other words, MBO’s can only really happen with funding from private equity or by the owner deferring some of their consideration

As a minimum, you will be able to extract an amount of value represented by the capacity to raise debt together with any surplus cash in the business, all potentially in a tax-efficient manner

The major downside is that you are highly unlikely to generate the cash on completion that could be achieved with a trade sale

Retain and step back

There are a number of instances where the owners build a strong management team and stand back from the operations but retain ownership

Whilst this route only facilitates a relatively low level of cash on completion, you continue ownership and benefit from profit generation as well as being able to sell the business at some point in the future

The key issue is attracting, retaining and motivating your management team – the separation between ownership and management needs careful managing


There are a wide variety of detailed options based around these general themes and a good adviser should be creative in formulating a viable option and in identifying and accessing the most appropriate suitor that works for you


In summary, keep an open mind to all the viable options

Thinking of selling in the next five years or simply want an informal chat over a coffee then the team at Provantage Corporate Finance would love to hear from you

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