Corporate Finance Services for your Business
An overview to Selling Businesses
Selling businesses is not as difficult as it may first appear.
Do you wish to reflect on several years of hard work and realise the value you have achieved in your business?
This is a key moment in your personal journey through life. There is a process leading up to this moment in your life when you leave the business you have created.
I work with you and know that for many it is the one opportunity to realise your personal wealth embedded in your business. However I do come across few business owners who have prepared for and are ready for it. So, they are likely to loose out.
In my case, I ran an accountancy practice in north Hertfordshire. On my 50th birthday I decided I wanted to leave the practice by the time I reached 60. I set a plan in place and, although there were stumbling blocks along the way which there inevitably will be, I achieved this and left the practice when I was 59.
Where does the process start?
It really starts with you and what you want to achieve. Once you have made the decision to do something you then decide whether that is by way of a sale, selling to management or whatever. When you have made that decision the process can begin. It may help you by reading Where does the journey to sell my business start elsewhere on this website
What are my options?
In succession planning, as in most things in life, there are options open to you. To find out more read the page on this site titled What are my Options.
Selling businesses is not as difficult as it may seem. In order to do this I need to create a succession plan and a business separate from me. It’s a business journey with that ends with you leaving it in some form or other.
Some entrepreneurs have an outright sale the destination. Part of the planning when setting up their business. Indeed, they write the Information Memorandum on day one.
This document is normally prepared when you come to sell your business. As a result it enables you to realise the maximum value when you leave. It maps out the journey setting times with key decisions-making points and defining what goes on by whom and when.
In my experience it can be a simple plan – not reams of spreadsheets. In a couple of pages define a simple vision; setting out where you are Now and where you need to be in the Future. The measures you need to achieve the vision are set out. Also the strategies; actions; who by and when is really all you need.
In my own and some of my clients’ experiences a successful exit occurs from careful preparation over months if not years. I do hope the path through this website will provide you with new perspectives on your business exit.
Best laid plans can go wrong
As we have seen recently with the collapse of Thomas Cook, and problems in the retail sector where businesses have borrowings at a level which are unsustainable, In my paper on the website headed “What is the impact of the collapse of larger businesses on their smaller counter parts”, I set out some of the actions you can take to identify and mitigate the risks of such a collapse in your supply chain on your business and how to avoid it upsetting your plans,
So, how do you prepare for and go through the business exit process?
If you are at an early stage, then there are a number of issues to address. These will unlock the value in your business and to maximise its value and to make it more sellable.
Some of the key issues to address are set out in the note on this web site.
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Where does the journey to sell my business start?
The start date and how we go about it is largely personal. The answer depends upon the extent to which you are financially independent from your business. Where this is the case then I would consider with you one path; while another path maybe more appropriate if this is not the case.
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How do I maximise the value in a business?
There are several areas that require assessment but in essence it is the goodwill in the business which has a big impact on the value. Unlike most other assets, goodwill cannot be seen or easily converted into cash. It is something that your accounts do not show unless a business has been acquired in the past.
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What makes a business more saleable?
There are the obvious attractions to a buyer when selling businesses – rising turnover; profitability and cash generation but there is a bigger picture here.
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When is the best time to sell?
I normally answer this question by saying: “When you are ready”, since the business however good it is unlikely to sell unless you are ready. The commercial answer is not so simple and there are a number of questions which need to be answered to determine when the best time is. The answers to these questions as well as those about your personal circumstances will determine when it is the right time to sell..
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Surprisingly, now (Autumn 2019) could be a good time to sell because of the three factors laid out in the paper Why now is a good time to sell my business, found elsewhere on this website.
Why do I need an adviser?
Some of the best advisers are those who have done it before. They can see the big picture but you do need someone who is familiar with the detailed process and can negotiate the best possible price usually by finding one or more interested parties. Appointing an experienced adviser will help you through the whole process, take away some of the stress you will be under and save you time and money at the end of the process.
If you would like to know more about this area…
How do I choose the right adviser?
Now this is a different question to why do I need an adviser.The choice here is about you and I. Do we get along? Does the chemistry work? Can you trust me?
If you go to the page on this website Andrew Watkin you can read more about Why you should use my services; What it is that I do and How I build trust with you.
How do I concentrate on running the business while trying to sell it at the same time?
While selling a business is not as difficult as it may first appear, it may become so unless it has been planned. Many people are involved and to maximise the value takes time during which the buyer can change their mind. Within the business itself, there can be issues with customers, suppliers and employees. Any one of these could delay the process. In order to be able to say the business is at least if not better than it was when you first started talking to the buyer is so important to avoid a deterioration in value over the period it takes to complete the transaction.
Where is my buyer likely to be?
It’s easy to value a business from the theories. It is entirely different achieving that value by finding the right buyer. The selection of the right buyer(s) to approach is crucial to achieving the interest in your business and it may be necessary to tailor or adapt it to suit the buyer when they come along.
What am I going to do afterwards?
Whether it’s playing golf, sailing in the West Indies, starting another business or looking after the grandchildren you must know how much money you are going to receive. Knowing the costs, your tax position and how much you are going to receive is crucial to you before you sign away your business.
So are you ready?
You will see there are hyperlinks to the topics I briefly cover in the above note.
Have a look at some of these and then contact me as below and we can have a chat.
I look forward to doing this with you.
Andrew is the director of Assynt Corporate Finance Limited and an Accredited Member of the Association of Crowdfunding experts.
Previously a partner and head of corporate finance at Baker Watkin LLP, Andrew has more than 36 years of experience in all forms of corporate finance across many business sectors.
Andrew is also the Chair of Governors at a local school and an Assessor of Expeditions for The Duke of Edinburgh’s Award.
You can find out more and connect with Andrew over on LinkedIn.
Need Help? Contact Andrew at Assynt:
If you are serious about selling your business, contact Andrew to arrange an informal chat, in person or over the telephone to assess the options open to you.
You can also contact Andrew by email at: email@example.com or by completing the form on this page.