Exit Strategies – Selling your business
Preparing a business for sale is a very involved and time consuming process and, just like when you sell a house, your business has to look its best on all levels before you can even think about entering into a sale agreement.
The amount of time and effort invested in grooming and preparing the business for sale depends, of course, on its size and operation. Involving a business advisor at the very outset of the sale process can eliminate many potential problems not to mention avoid unnecessary costs. Any type of business, from owner operator to multi branch concern, can benefit from the input of a professional and experienced business advisor.
Two major factors that will determine the length of time required for the grooming process are:
- the extent to which the business depends on the owner’s active involvement.
- how much value the owner wants to make from the sale of the business.
If you are looking to exit your business – for whatever reason – it is extremely advisable to invest in an exit plan to maximize the return from selling your business to a third party. Once established that there is value in selling your business, preparations can be made to maximize the sale price.
It is also important to negate any potential liability to the new owners if the business does not meet their expectations. It is crucial that no blame can be deflected back to you because the purchaser is not suited or lacks the ability to effectively run their new acquisition.
Care must be taken that small details are not overlooked. For instance, the business account records must be accurate, making sure, for example, all provisions such as holiday pay are entirely up to date in order to prevent any last-minute surprises and alterations (reductions) to the sale price. Advance Revenue should also be taken into account when presenting the accounts to a potential purchaser. Such items can overstate the balance sheet, and hence your net tangible assets on sale!
Working with a Business Advisor who has helped sell many businesses across a variety of industries will alleviate the stress involved, and ensure that all aspects of your business are optimized for presentation so that both parties have a smooth transition.
