We previously gave an overview of the different ways that a business owner can get out of their business:
- sell the business
- pass it on to a family member
- negotiate a management buy-out
- wind the business down
In this article we look at the option of selling your business.
Firstly you will want to consider when is best to sell your business. This will come down to your personal circumstances and objectives. However, it is clearly better to sell when your business is doing well, with turnover and profits rising.
Business owners achieve the most value from their business sale when they have really prepared for it. This starts with considering what the buyers will uncover when they undertake their Due Diligence. We can help you undertake an objective Due Diligence exercise, so you can understand the processes, systems and measures you need to put in place to realise the optimum value from your business. This exercise should be undertaken at least 18 months ahead of starting the Sale process.
Next, you will want to understand the value of your business. Valuing a business has been described as both an art and a science. The process begins by establishing the expected profitability of your business at the time of valuation. This is followed by an assessment of the risk profile of the business to determine the appropriate cost of capital or multiple cost of capital to apply. We can help you understand the value of your business.
Finally we will move into the Sale process. This can be a difficult time for business owners: who are trying to secure the most value from the sale, whilst coming to terms with the emotion-pull of selling their business.
We can help and support you through this process; and the best results are secured when we are involved early on in the Sale process. If you are thinking about selling your business, please call Andrew or Jackie on 01625 524127.