Selling your business

For many clients, selling a business is more than a transaction; it could very well mean passing on a hard-won torch to someone outside of the family. But learning to let go and pass the reins to another is just part of the selling process.

Of course, it’s also common for many sellers to have second thoughts throughout the selling process, which is why our business selling brokers encourage all our clients to consider the following when thinking about selling the business:

Maybe it was always the plan or maybe you’ve never thought about it. Either way, we know you’ll want the maximum value of your business before selling it. However, it’s important to think about what’s driving your decision to sell.

Perhaps you feel it’s time to take some risks off the table, or you might feel ready to step back. Alternatively, you might want to pursue a new business venture, and the sale of your current business will help fund it.

Regardless of your reasoning, holding your objective in sight and presenting it as a positive story for why you are exiting will help you navigate the process of liquidity planning and selling your business as you work towards your end goal.

And if you’re having second thoughts, keep the reason for selling your business at the forefront of your mind throughout the process. Does the proposed exit strategy bring a sense of closure and allow you to plan for the future? If not, perhaps you haven’t found the right buyer yet, or maybe it’s not the best time to sell.

It may seem pretty straightforward, but it’s always worth sitting down and considering what exactly you’re really taking to market. Are you planning on selling the whole company? Are there parts of the company a buyer doesn’t find so attractive? Perhaps you might want to keep the properties. And what happens if the business carries your family name - is that part of the sale?

For many previous owners, it can be difficult to see your business in the hands of another. It can also be hard for you to identify where an external buyer may recognise the value of your business.

If you’re struggling with this, try to step back and take an objective look at the value a buyer will see in your business. Consider what you would look for and the questions you would ask if you were looking to acquire another business to bring into the fold of your existing company.

Furthermore, make sure all the nuts and bolts of your business, like data, contracts, systems, and procedures are transparent and visible. Being able to explain the track record of performance and profitability while demonstrating future potential should help attract buyers and set the path to a better deal.

When it comes to selling business and financial planning, there are many questions you’re going to want to ask and no real fixed blueprint for the overall selling process.

For example, think about the buyer’s background and motivation. Your business may interest a trade buyer (someone looking to extend their market/product share), or a financial buyer (someone looking to grow investment potential). It may be that someone from within your own company is interested in taking the reins for a price or perhaps you’re courting a bid from overseas from a previous customer.

Whatever the reason, it’s important to appeal to their ambition to get the best deal. Either way, make sure your management team is prepared enough for whatever type of sale you pursue and can cope with your departure without damaging the value of the business. Your people are a huge asset when it comes to making a sale. Are they as ready for the challenge as you are?

Picking exactly the right time to sell in your business or market cycle isn’t always easy. However, being ready to go when the time is right can make a real difference to the sales value you achieve and to the ongoing potential of the business.

Assembling a team around you that has the right expertise and that you trust is key. When looking for a business selling broker, judge their track record of handling sales in your sector and working with businesses of your size.

Good advisors for selling a business typically have vital experience, but you also want to make sure you have personal chemistry with them and a sense that they understand you and your business.

Don’t forget to have a plan for communication across the whole business as well; sharing updates that keep people informed and well-equipped for the road ahead. News of a potential sale can often affect employee and customer sentiment and keeping them up to date with what’s happening can help allay any fears they may have.

Prepare yourself and your business for a future sale with our latest wealth planning alternative investment insights:

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