Ownership Change
All my clients are considering some form of ownership change. It may just be just selling part of the business to reduce shareholding or alternatively it’s a complete exit by selling the whole business.
For most business owners, selling their business is one of the most critical decisions they will make in their business career.
How do you know that you are doing the right thing and getting the best outcome (especially the best value) possible?
The individual situations and expertise of business owners can vary a lot, but the underlying principles to be considered are essentially the same.
These foundations typically fall into the following topics and conversations:
Call me to get the answers to your burning questions.
Thinking of Selling
The first steps are often exploratory. This is a time to get your thoughts checked and to explore possibilities before confirming what course of action you want to take.
There are usually many moving parts to a business sale and potentially many parties involved. This is the time to speak to as many relevant parties as possible without compromising confidentiality.
For many successful business owners this is a process that starts many years in advance (in some cases when the business is started!).
Regardless of the time available, the key success factors include:
- Getting clarity on what you personally want as an end result (value and timelines)
- Getting challenged on the ideas that you already have
- Gathering information including the full range of options that are available
- Understanding how your role might need to change
- Being clear on what you need to commit to versus what you are prepared to commit to, and the implications of doing so (especially for value)
- Getting clarity on what help and resources you need
- Understanding the pitfalls you need to avoid
- Making sure that all owners and stakeholders are in agreement
I want to sell
Some business owners will have already done all their homework and are all in agreement that they want to sell.
After considering the options, they have a preferred approach; are clear on timelines and on the outcomes (including value) that they can realistically achieve.
The question then is – what is the sale process you need to run to get out preferred outcome?
Again, each situation is different, but the factors to be addressed include:
- Whom to approach; how and in what order
- What information will be required and when. This includes initial background information (e.g. information memorandum) and the ongoing information needed during the process including due diligence
- How to address confidentiality and commercial sensitivities including with employees and key stakeholders (e.g. customers and suppliers)
- Who will lead the process – these are specialised processes and it is essential that people are available and not distracted by day-to-day business operational matters or ‘day jobs’
- Who and what needs to be available during the process. Owners and other key people will need to be available at various times, for example for management presentations. Site visits may need to be arranged
- Action plans and timelines for the process to optimise probability of success and maximise value
- External advisors (transaction specialists plus trusted advisors) to provide the necessary support and advice to the owners
What is my business worth?
The question of what a business is worth will inevitably come up in every stage of a sale process. Ultimately valuation is highly subjective and is determined by many factors. If you as an owner is going to get the best price possible for your business, then you must have an understanding of:
- what drives value in your business. What are industry multiples versus what comes down to the individual circumstances of the business? How much can you realistic expect to control or be able to be influence?
- value of the business now versus potential future value
- how best to prepare a business for sale to optimise time, resources and commitment that you will need to make
- how the sale process affects the value outcomes. Different sale strategies; common pitfalls to avoid; commercial risks, etc.
- what information is needed to support the value and risk profile of the business
- the different probabilities of getting different value outcomes
- how different negotiated terms can significantly impact the value that you as an owner will ultimately get for your business
- how to bridge value gaps between how you value your business and how external parties perceive value
Call me to discuss your thinking
Business Value
There is always more than one value for a business. It is my role to simplify the various scenarios in order to achieve the best sales value for you and your situation.
Business Confidence
A solid and effective business sales strategy hinges on in-depth knowledge and information. Act with confidence knowing that you are making the best of your position and your situation.
Business Experience
My in-depth involvement with many and varied business sales has given me the ability to identify all the possible “variables” that impact the outcome of a business sale.
Business Value
There is always more than one value for a business. It is my role to simplify the various scenarios in order to achieve the best sales value for you and your situation.
Business Confidence
A solid and effective business sales strategy hinges on in-depth knowledge and information. Act with confidence knowing that you are making the best of your position and your situation.
Business Experience
My in-depth involvement with many and varied business sales has given me the ability to identify all the possible “variables” that impact the outcome of a business sale.
