Preparing a company for sale | Isosceles

Preparing a company for sale

I recently spoke about  preparing a company for sale at the South East Business Innovation & Growth seminar ‘Preparing a Business for Sale’ which was held in Guildford on 8th April.

About 30 CEOs from SME companies attended, and the feedback was phenomenal:

“Very useful – will come again”

“Well presented and informative”

“A well constructed event which bought out many key areas for consideration”

“A stimulating and thought provoking meeting”

“Very timely, relevant and thought provoking”

“Outstanding”

“Excellent summary should you be considering options”

“A thorough and professional overview of considerations when planning an exit strategy”

“Thank you”

“Excellent, timley, relevant

We have prepared a number of our clients for sale and likewise helped a number of our clients purchase companies so we have experience of both sides of the negotiating table. I can tell you, without doubt: it’s all in the preparation!

“By failing to prepare, you are preparing to fail” (Benjamin Franklin)

Here are my top ‘dos and don’ts’ on how to sell your business for what its worth.

Do

  • Start the process early – at least a year before you want to sell
  • Identify your value enhancers, make sure your business plan compliments your exit strategy
  • You can go a long way to manipulating your exit process through the partnerships and channels you establish
  • You will get a greater value if you don’t have to sell and if you can make it a competitive process
  • Bring in non-execs or advisors who have done it before
  • Tie up all those loose ends – unsigned contracts, updated contracts of employment, new sales term increase prices, IP
  • Sort out outstanding shareholder issues, these will nearly always come to the surface during a sale process.

Don’t

  • Take the first offer that comes along or exit too early – £3m will make a much bigger difference to you personally than £1m i.e much more than three times
  • Appear desperate, especially if you have had a difficult trading period and have just recovered – the temptation to sell while the going is good is sometimes overwhelming
  • Ignore difficult issues – unhappy shareholder, difficult member of management, customers about to cancel. Sort them out before you start
  • Leave any loose ends! The process will take longer than you think and loose ends will unravel
  • Forget you need to pay for good advice – but not until you need it

I recently wrote in this blog about ‘Selling a Business – The First Time Entrepreneur’. If you didn’t read it first time, now might be a good time.  Click here to read

Mike O’Connell, CEO, Isosceles Finance