Selling Your Business
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The sale of your business is very often the final business transaction many owner managers will undertake, whilst there are serial entrepreneurs who are involved in many businesses, to many you only sell your business once. It often comes after many years of hard work, and will provide you with funds for your retirement, it is therefore essential that if you are to maximise the value of your business you plan well in advance. A business that has been well prepared for sale will achieve a higher value than one that has not, this can amount to a significant amount, therefore it is essential you think about your exit from the business today, even if you think it is a long way in the future.

Inspired Business Vision have been involved in many sale of business situations, as advisors and as business owners. We bring a pro-active approach having had real experience of being personally involved in situations, where it was our money at stake. This has involved the sale of businesses to other corporate buyers, MBO/MBI situations, sales to PLC’s, and sales where venture capitalists were exiting and realising their investment.

A sale of your business is usually a decision that is controlled by you, however remember that sometimes that decision can be taken out of your hands, for example ill health or death. It is therefore very important that you run your business efficiently and plan well ahead, this will maximise your value. Planning many years in advance (especially from a tax point of view) can increase the net value you receive for your business, so that whatever the circumstances of your disposal you will be prepared to maximise the value. Businesses often get approached to be acquired, therefore having the right structure and having planned at an early stage for the eventual disposal will assist in these situations to maximise your value.

Some of the key areas that will determine the value you will obtain for your business include:

  • The level of profitability
  • The state of the market
  • Any unique products or services that you provide
  • Having strong long term commercial contracts in place
  • The number of willing buyers
  • The level of preparation you have made for the handover (often called grooming)
  • The quality of your management team

Selling a business can be emotional and time consuming, you have to get it right. Shown below are some of the key areas that will be involved if you are considering the sale of your business. Inspired Business Vision will be able to help you consider all relevant matters connected with the sale, and talk to you from a practical point of view.

  • Plan ahead – Think about a sale well in advance of you actually wanting to sell your business. You may decide for example you want to retire at a certain age or in so many year’s time
  • Consider the market – Picking the right time to sell your business can affect the value achieved
  • Work with advisors – Ensure all angles are considered, business structure, tax planning, etc
  • Grooming the business – Showing the business in the best possible light is a crucial factor in obtaining the best price
  • The Sales memorandum – This is the initial marketing document sent to interested parties, it will be written jointly by the management and advisors and can be time consuming in its preparation
  • Marketing the business – This may stretch over many months and be time consuming, you may get many interested parties but many may not be serious
  • Considering the offers – If you are lucky enough to have a number of offers you will need to consider each on their merits, this process may involve financial and non financial considerations
  • Completing the deal – This will involve the due diligence process and the Sale and Purchase Agreement. Even when the deal has been agreed in principle, this can involve many challenging moments as you get closer to completion.

Contact Us now to see how we can help you maximise the value of your business in a sale situation.

Link to Case Study

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