Here are our top tips if you are considering selling your business and what you can expect from the sales process.
1. Is selling the right option?
First of all, consider whether a sale is the right path for you and your company to take. Commencing the sales process is a big commitment, so reflect on your motives for selling, and what your alternatives may be. Consider whether you want to continue with the business for any period post sale or if you want a clean break. Also question whether it is the right time to sell – both in terms of the market and the life cycle of your business.
2. What should I do to prepare for the sales process?
Depending on the current state of your company’s internal systems and controls you may need to spend several months or more getting your company ready for the sales process. Consider the following:
3. How can advisors assist with the sale?
You should always appoint professional advisors to assist with the sale. Your advisors will help you with presenting your company in the best possible light. They can advise on the valuation of the company, compile an information memorandum for potential investors and assist with aggregating due diligence information. Always take tax advice to ensure that the sale is structured in the best possible way.
You will also need to appoint a lawyer to assist with the sale agreement. Be sure to select advisors you trust, and that you will have a good working relationship with.
4. What questions will be asked during the due diligence process?
Expect a lot of questions. It is common for the following to be scrutinised during the due diligence process:
Finally, it is vital to be transparent during this process, otherwise it can often lead to delays. You will be required to provide supporting document to assist with verifying all information provided.
5. Do you need a Sale Agreement?
If you are selling the trade and assets of your business or a company, you will need a sale agreement. Your lawyers and accountants can assist with the drafting of this agreement and will ensure you understand the content. It is vital that you are aware of all the warranties and indemnities which you are accepting as part of the deal.
It takes time to sell a business and there is a lot of hard work involved. It is critical that you prepare the business correctly because trying to sell without a well thought through plan in place will create a poor impression and could impact the success of the sale or price you achieve.
We can advise you through the sale, assisting with business plans and financial models, providing valuation of your company or key assets and preparing the necessary documentation.
Please get in touch if you are thinking about selling your business and we would be happy to help support.