Selling my business: what do I need to consider?

"I'm selling my business sometime in the future, how far in advance should I prepare?"

Proper preparation prevents poor performance - so the saying goes. The more effort spent preparing to sell a business and preparing its management for the sale process, the more attractive it becomes to buyers. It is never too early to start - a year to eighteen months before selling the business is recommended. When selling a business, prepare, prepare, prepare!

"How do I find the best buyers for my business?"

Cast the net widely for buyers. Business owners are often surprised at the range of buyers that are interested in their business. Good buyers may be known to the owner, but thorough buyer research often uncovers a 'must have' buyer willing to pay much more.

"Is finding one buyer enough?"

No, it's not ideal as 'competition is king' when selling a business. As in sport, competition brings out the best performances. For the best results, buyers need to know that if they are not prepared to pay top price for a business there are plenty of others who will.

"How do I manage more than one buyer?"

Avoid exclusivity like the plague. To avoid competition, some buyers want the race to themselves. This exclusivity ties the seller down and should be avoided at all costs.

"Why are 'diamonds in the drawers' so important?"

Investment opportunities are often annotated with the warning 'Past performance is not a guide to future returns'. A buyer is most interested in the future and sellers should make every effort to highlight all their business's potential and opportunities. If you can't quantify them, how can you expect a buyer to do so?

"How do I value my business?"

Whilst it is helpful for sellers to know what their business is worth on a stand alone basis, the value in a business that really counts is what the buyer is willing to pay. Thorough research finds those buyers willing to pay over the odds in pursuit of growth, and competition for the business pushes them to pay up. We offer a business valuation service please contact us today.

"I'm considering selling my business to a private equity group who have made an approach, what do I need to know?"

Private equity groups are the property developers of the business world; they buy businesses cheaply, do them up and sell them on as quickly and profitably as possible. They would be a good option for an owner manager who is happy to stay on and reap the rewards a few years later. We can help you explore the potential and pitfalls of private equity.

"How long will it take to sell my business?"

Don't underestimate the length of the business sale process, and the disruption caused and management time required. A commitment of four to six months of hard work by the senior management team is realistic. Once you start you need to finish. Testing the waters and then trying again later, will give the impression that no-one was interested in buying your business.

"Should I use my usual lawyer?"

Don't lose value through a 'sloppy' contract. Some lawyers are commercially savvy. But most aren't. If you don't know the tricks of a sophisticated buyer - you need to find somebody who does.

"Do I need to use an M&A advisor when selling my business?"

Professional mergers and acquisitions advisors will generally increase the chances of an excellent result, and reduce the risks of a failure. The provision of advice on this page are all areas where good advisors can add value way beyond the cost of their fees.

"Selling my business was a once-in-a-life-time event. Finding the right corporate advisers was essential to completing this transaction successfully, and Shield Corporate Finance proved to be an excellent ally to have on our side during this process." Read our client testimonials.

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