Selling Your Business?
So ...you want to sell your business ?
So what are the key elements to be considered?
Obviously, from the Seller's perspective a key element of success is the value raised from the transfer; ... and it is the Sellers desire to transfer for the best possible price. But, they should consider the keywords in that statement, which are, ... "best possible price". That price should not be at the expense of chasing off prospective purchasers.
Both the Seller and the Purchaser are equally looking for a good deal. Selling a business is just like any other transaction. If either side develops an attitude of overt greed or dogmatism regarding their position or their self-interests, then they risk alienating the other immediately and destroying any hope of a successful outcome.
There are many 'Business Transfer Agents' (and some 'Commercial Estate Agents') who seem to be incapable of recognising that simple truth. They adopt a corporate 'holier than thou' attitude, and alienate many serious Buyers before they have even delivered the information about your Business to them. Our first piece of advise then is:
"Select the Agent representing you with extreme care, ...get it wrong and it could cost you a great deal of money".
We would also caution the Seller to truly consider whether they need the excesses of bureacracy indulged in by many of the lesser Agents. We are referring here to the bureacratic insistence on worthless pre-sales contracts and (so-called) 'Confidentiality' Agreements that the unprofessional insist on employing; and which in our experience do nothing other than alienate Buyers before they have even had a chance to seriously consider your business.
Selling a business is like any other transaction.
Buyers want value for money and an attractive proposition that meets their criteria. They are not going to do the seller any favours. To offer to sell your business is always to enter into the buyers marketplace. Every Seller should ask themselves "would I buy my business on these terms"; and bear in mind that in most instances 'Cash is King'.
But the shrewd Buyer will also recognise a good thing when he/she sees it; ... and with the right management of the sale they are often prepared to go the extra mile to secure the purchase.
Although acknowledging that selling a business is very much a buyers marketplace, any professional buyer will eagerly pay a premium price for the right offering on the right terms.
Sellers should aim to demonstrate that their business is in the best possible condition at the offering stage. The business should demonstrate a clear potential for profits growth; ...and should have been correctly and expertly valued.
Here are our 'Top Tips' for Sellers. By paying early attention to the checklist of basic issues the result should be a quicker sale for more money.
Sellers should consider their position with respect to the following issues before they then consider putting up the 'For Sale' signs:
* The ability of the business to function without them, (are they the 'Key-Man', ...and if 'yes' then what steps have they taken to overcome that weakness?)
* Maximising profits and showing an upward trend
* Maintaining good credit control and disposing of surplus assets
* Maximising cash flow and balance
* Developing a competent, supportive management team
* Producing realistic financial projections
* Showing a record of hitting or exceeding budget targets
* Creating plans for strategic development that show the business potential
* Ensuring all intellectual property is protected
* Settling any litigation and taking steps to ensure that it does not happen again
* Resolving any tax issues with your tax advisers
* Ensuring the accounts are fully up-to-date and have been filed on time.