AS THE OWNER or significant shareholder of the business, you may be considering how to sell your business.
Initially, you will apply an acceptable price/earnings ratio and decide if it’s worth selling. If the accounts show the business is in good shape, you might be able to begin selling right away, but if not, the business might need to be prepared for its eventual sale.
It’s at this point that you should apply the first rule of selling your business – Don’t attempt to sell your business yourself.
This is not a blatant plug for me and my services, but sound advice from having seen too many business owners attempt to sell their business, where the deal they secured, (if the business was sold at all) has ranged from average to very poor.
You see, selling your business for the best value generally takes a great deal of preparation, planning, a strategy, research and will likely involve teamwork with others. It can prove to be a great deal of work, will take time and require specialist skills.
At a time when the business needs all your attention as you push hard to maximise its value, the last thing the business needs is for you to take time out, to run the sale process.
Instead of a do-it-yourself approach, have someone else take the lead and manage the process, under your control.
Over the past twenty years, having sold businesses of my own and helped several others to sell their business, I have learned that if you want the sale to go well, applying this first rule of selling is essential.
Who should you ask to help?
If not the business owner, then who should take the lead in the process of selling the business?
I must declare an interest when answering this question, because a business owner will generally get best value if they hire someone to help – someone that understands the structure of a business sale and can take the lead in managing the important elements of the sale process.
When selling a business, having a powerful mix of relevant skills and experience can prove invaluable – a combination of finance, sales, marketing, strategy and communication skills at senior level, plus the gravitas of an accomplished managing director who knows his or her way around a business sale.
If you can find all these skills in a business person who has also sold a business(s) of similar size and complexity to yours, then you will probably have a key component essential for a successful business sale.
In addition to helping you produce a two-stage disclosure document (Journal) that will be used to discretely market the business, your consultant can help you to groom key parts of the business, in advance of going out to the marketplace.
Consultant / intermediary
Your consultant can also be an intermediary on behalf of you and other shareholders, to make an approach and if appropriate, have a conversation and hold an initial meeting with potential purchasers on a ‘no-names’ basis, to pre-qualify their suitability as a potential purchaser and with a view to creating an environment in which, the directors of both companies can meet together to discuss the possibilities.
Free Guide. Pre contact and post contact stages
You should expect there to be several stages to go through, on your way to concluding the sale of your business. I have produced a useful checklist of tasks, activities and stages in a free guide that you can download below.
The next step?
If you would like to discuss the potential of selling your business in a confidential, no-obligation and no-fee discussion with me, please contact me here.