Getting Your Business Ready For Sale
Achieving the maximum amount of money for selling your business will only happen if the sale has been prepared for well in advance. This doesn’t mean a month before; an optimum outcome is almost always the result of several years pre-planning.
Ask yourself what acquirers are most interested in. Any list will invariably include: strong management team not reliant upon one individual, annualised sales and profit growth, broad customer base, efficient processes and systems, protected intellectual property, low staff turnover, minimal risk of contingent liabilities, well kept financials. No doubt you can add your own choices to the list.
The point is that none of these can be achieved overnight so start planning for sale and grooming your business towards that end goal now.
Before deciding how to get the business in a position to sell, you will need to determine precisely what you want from the outcome. In order to do this, ask yourself the following questions:
- Do I want to have an ongoing involvement with the business or get out completely?
- Do I ideally only want to realise a part of my investment in the business?
- What impacts on others such as staff or key customers are important to me?
- Am I constrained as to what I can do in any way by other shareholders or directors?
You will then need to consider more generic questions in order to ‘shape’ the business:
- How will a buyer value my particular business?
- What do I think will happen to market conditions over the coming years
- Are there any industry specific changes envisaged?
Once you have the answers to these questions you are in a position to steer the business towards the shape that will give the best sale outcome. As a simple example, if you are in the construction business and perceive that there will be a housing crash in three years, then you know you ideally want to sell the business within two years and need to start bringing on the management team almost immediately.
Contact us for a detailed analysis of the steps you should take to start readying your business today.