You’ve spent years growing your business and adding value to the company. Now it’s time to sell up, get a good deal and liquidise the equity you’ve had locked up in the business.
In this series, we’ll give you all the advice you need to plan your exit, add value to the business, negotiate a great deal and define your new pathway once the business is sold.
Let’s look at some important ways to achieve the best possible deal for your business sale.
Selling your business is generally the end step in a much longer journey. If you’ve put together a detailed exit strategy, you’ll have been planning this sale for some time.
The important thing at this point is to make sure you get a great deal and realise the best possible sale price – giving you the return you deserve for all your hard work.
To put yourself in the optimum position when looking for a buyer, here are a few tips:
Know the value of your business
Make sure you’ve conducted a thorough valuation to understand the true market worth of your business. This gives you a strong negotiating position and helps you set a realistic asking price that’s attractive to buyers.
Research the market in your industry
Take a deep dive into current market trends and comparable sales to understand what a fair price is for a business in your industry. Armed with this info, you’re in a good position to negotiate a competitive price.
Highlight the strengths in your business
Use your sales materials to emphasise the unique selling points and competitive advantages of your business. This could include having a strong customer base, explaining the experience of your management team, or outlining the benefits of your proprietary technology and intellectual property etc.
Know the funds you need to realise
You’ll have plans for what happens after the sale, whether that’s a comfortable retirement, or the founding of a new enterprise. Make sure you know how much equity will be needed to fund this lifestyle, or startup plan. This number will drive your asking price for the business and your own profit from the sale.
Be prepared to negotiate
You may have a price in mind that your prospective buyer is unwilling to meet. Be prepared to negotiate on price, terms, and other aspects of the deal. Understand your bottom line, know the return you need to achieve and be willing to compromise in some areas, when necessary, to seal the deal.
Always seek professional advice
Mergers and acquisitions is a specialist area. Think about consulting with a business broker or legal adviser to guide you through the negotiation process. With the benefits of experienced, professional advice, you’re far more likely to get the best possible deal for the company.
Talk to us about planning the sale of your business
Finding the best buyer and securing a mutually beneficial deal is one of the most critical points in your exit strategy. Getting it right now is vital for your long-term plans and financial security
If you’re ready to sell and want some expert advice, come and talk to the team. We’ll help you work out the value of your assets, assess the current market and can link you up with brokers and M&A specialists to get the key advice you need.
At the point of selling your business, getting a good price for the company will be a major goal. A key way to achieve this is to add value to the business as part of your ongoing exit strategy.
In this series, we’ll give you all the advice you need to plan your exit, add value to the business, negotiate a great deal and define your new pathway once the business is sold.
You’ve put blood, sweat and tears into this business. So, you’re going to want to achieve a sale price that reflects this hard work, giving you the funds to start the next phase in your journey.
Your potential buyer will be looking for a profitable, well-run business that can prove it’s a viable enterprise. To do this, it’s vital to look at core ways of improving the attractiveness of the company, gradually adding incremental value and allowing you to negotiate a good price.
Let’s take a look at some important ways to add value to the business:
Increase your profitability
A buyer wants an acquisition that will turn a profit. To boost the company’s profitability, look at improving your margins, reducing costs and increasing revenues. Ways to achieve this can include streamlining your operations, negotiating better deals with suppliers and increasing brand loyalty with your customers.
Strengthen your financial performance
It’s important to run a tight financial ship. Aim for the company to be in a positive cashflow position, reduce your ageing debt and strengthen the balance sheet to demonstrate financial stability. This will mean getting in control of your inventory and spending, being proactive about collecting outstanding receivables and exploring financing options, such as invoice finance or bank loans.
Nurture your customer relationships
Loyal customers spend more and provide a stable pipeline of sales and revenue. Building these strong customer relationships is a critical part of adding value, and can start by providing excellent customer service, offering loyalty programs and actively seeking (and acting on) customer feedback.
Invest in the company’s growth
A growing company is an attractive proposition to any buyer, so it’s important to continue investing in growth. Explore new products, services or markets to expand the business’s potential, add value and show the potential behind your business concept. The R&D, strategic planning and resourcing that’s involved will be an investment that pays off once you have an interested buyer.
Prepare for the due diligence process
Before a buyer makes an offer, they’ll want to carry out due diligence checks on the business. To be ready, you’ll need to get your financial records, contracts and other relevant documents in order, and make sure all the information is easy to find and access. Making these checks simple and straightforward helps potential buyers assess the business’s value and gain confidence in the company.
Talk to us about planning the sale of your business
Making your business more attractive to a potential buyer takes good planning, patience and a real focus on adding value. Starting this value-add process early is vital.
If you want to start adding value to the company, prior to selling up, come and talk to us. Our team can help you deliver an exit strategy that increases value and delivers a great deal.