When is the best time to sell?
When profits are rising and the future looks good.
How should you market your business?
Professionally. This is probably the biggest transaction you’ll ever undertake.
How much is your business worth?
It is worth how much a prospective purchaser is willing to pay, this may be more or less than you think it is worth.
How much is the business worth without you?
It depends. It is important to have a proper management structure so that the business is not solely dependent upon you.
Who will pay the most for your business?
Probably strategic purchasers, who may have strategic reasons to get into the market you are in (“fast track” route).
How can you maximise the worth of your business?
Some cosmetic (switch part of your remuneration to dividends) and some real (such as reducing “nonbusiness” expenditure). Choose the right purchaser.
How soon do you want to conclude a sale?
If you are in a hurry you are unlikely to get top price. Getting the best price does take time.
How do you deal with potential purchasers?
Carefully. Remain positive, listen to them and be open to what they say. It’s a negotiation and each side needs to achieve a result.
How much of your time will the sale process take?
Information memorandum, meetings, negotiations. This is only the beginning. Be prepared! It is usually a time consuming process so it is important to stay focused on continuing to run your business.
For how long are you prepared to work for a new owner?
Be pragmatic and realistic. You want the time to enjoy the cash and yet may have to continue working for a period for the new owner.
How will your customers react to a change in ownership?
Careful consideration is required. Without customers you don’t have a business to sell. A purchaser will want to ensure that the business does not “evaporate” once they are in charge.
How will your staff react to a change of ownership?
Much of the goodwill value rests in the staff. If staff become disgruntled, then you will have problems.
How do you deal with minority shareholders?
It will usually be important that you can deliver 100% of the shares so you need to bring the minority with you.
How will it affect your business if your competitors find out that it is for sale?
Have no doubt that they will tell your customers and staff (embellishing it with rumours).
What are the pitfalls of selling a business?
(i) those that affect the inherent value of the business (e.g. key staff find out and leave), and
(ii) those that reduce the value you receive from the sale (e.g. a claim under the warranties).
What will you do with the money you receive?
Protecting this nest egg is essential.
How much tax do you want to pay?
With proper planning there are several way to minimise or totally eliminate the tax on selling.
Do you have a good corporate lawyer?
Your long standing “family” solicitor friend will probably be out of his depth.
How will you fill your spare time?
Little or no thought is given to this. This can result in deciding to abort the sale, often close to signing – an expensive exercise.
What should I do now?
Please contact your trusted advisors at Baker Tilly Hughes Blake.