Thinking of
selling your business
Retirement, health, lifestyle, new challenges, at some time the question of new ownership or control of your company will raise its head. When is the best time to sell? How much is it worth? Who will buy it?
All are relevant and important considerations. At the outset taking time to consider and address aspects of the business a prospective purchaser will focus on, could have a major impact on the realisable sales value for your business. Maximum value is more likely to be achieved and negotiations are always likely to progress faster and easier for the Company when dealing with a motivated purchaser.
Selling a business is not just an accounting or legal process, it is primarily a sales and marketing activity. While these aspects are very important, primarily it is the sales and marketing activity that has a clear focus on maximising value for the owner.
The approach and methods used, who and how prospective purchasers are approached when selling your business will have, as our experience confirms, a significant impact on the achievable value of your company. If a competitor is approached who knows your business is for sale, given their own knowledge of your sector, they are unlikely to pay a premium unless you have demonstrable points of difference or the barriers of entry to your markets/customers are particularly high. Consequently, the type of Company approached and indeed the way the approach is made, can have a significant bearing on creating and securing interest in your business.
You are likely to get the best price for your business when there has been growth and with prospects of future growth.
It is a fact that many entrepreneurs are attracted to high growth opportunities as an expanding business normally offers easier opportunities to create additional business. In determining value for your Company, prospective purchasers will be putting a value (of their own) on the business.
It is good practise to review your business every six months or so and consider whether now is a good time to sell. In fact asking the question “would people want to buy my Company?” is a good test of whether you are generating value. Keep an eye on your company’s growth rate and future prospects.
No two deals are the same, but experiences are certainly transferable. You normally have only one opportunity when selling your Company – give yourself the best opportunity to make the most of it.