Preparing to sell your business – Planning is key
Making the decision to sell your business is life changing. Selling a business successfully requires a great deal of planning, which owners often underestimate. On average 58%* of business owners have no succession or exit plan in place.
Corporate Commercial Partner, Tom Webb discusses the practical points business owners need to consider when preparing their business for a successful sale.
Objectives of selling
Achieving the best price is an obvious goal, but for many business owners this is not their only goal. Protecting key employees or the location of the business maybe important as well as whether you will remain involved for a period of time or leave immediately, all of these factors need to be considered in advance.
Robust management team
While no one likes to think they are irreplaceable, in business it is vital that the management team you leave behind can thrive without you. If they can’t this could negatively impact the value of the business. Allowing your management team to space to run the business will help to improve buyer confidence.
Timing is key.
News of a potential sale will impact your employees, who will worry about job security and your customers who may be concerned about the impact on long term relationships. Managing the news of your decision to sell will enable you to manage the expectations of your team and that of your clients which ultimately will help to maintain the value and stability of your business.
Consider your options
Evaluate your options and make the best selection for the long term. Taking the first offer may not be a wise choice. Ask yourself, who is the best person to buy and run my business?
Be transparent
Anticipate buyer questions in advance and provide cash projections, trading forecasts and future potential to help ensure no surprises during due diligence and overall a smoother process
Valuation
For trading businesses, the valuation is typically calculated as a multiple of profits and the multiple the buyer is willing to pay. A track record of profitability and a sense of future potential will also impact on the value achieved
Trusted advisors
You are the best promoter for your business as no one knows your business better than you but finding the right team of experts to help you sell your business is crucial to your success.
After your sell
Extra time and extra cash may seem like a dream come true, but when you’ve spent years of your life building a business and making it a success, suddenly handing it over to someone else can be difficult. Speaking with financial planner who can work with you to create a plan for your financial future after your sell can help you enjoy your hard work.
To find out more about how we can help as you prepare and manage your plans for business succession or exit, contact Tom Webb today on 01225 750 003 or email tom.webb@mogersdrewett.com. To speak to our in-house financial planning team who can work with you to create a plan to achieve your financial goals call 01225 750 000 or email stuart.doughty@mogersdrewett.com.