Is your company sale-ready? Get prepped to maximise value
Many people are familiar with the phrase ‘failing to prepare is preparing to fail’.
It is a quote attributed to Benjamin Franklin, one of the Founding Fathers of the United States and a man who, during his 84 years on this planet in the 18th century, became known as a writer, publisher, diplomat, scientist, inventor and political philosopher.
Franklin displayed an aptitude for business and, some 250 years since he was creating his legacy, his famous quote remains as relevant today – be it in the sporting arena, the exam room or, most appropriately to where you’re reading this, in the world of company sales.
If you intend to exit your business in the foreseeable future, preparation is of paramount importance. That was among the key messages conveyed by the speakers at the Corporate Finance Mid-Year Review, hosted by the Pro-Manchester Business Community and attended by KBS Corporate.
To paraphrase Franklin, failing to prepare properly for a company sale creates a significant danger of leaving lots of value on the table.
How do you prepare properly? Well, we have compiled a guide which explains the company sale process step by step, from deciding what you want to achieve right through to signing the final agreement, informing HMRC and popping the cork on a bottle of champagne.
However, the taste of bubbly would turn to vinegar if you fail to plan thoroughly and end up selling your company for a much lower price than you had hoped for.
A transaction adviser at the Pro Manchester event told the audience: “If you’re a founder, what you can do to prepare is to decide what you want your exit to look like. Is it a private equity or trade deal, is it a majority or minority sale? Do you want to kick on to the next part of your journey, do you want to maximise value? It can be quite complex to navigate but having some of those open conversations is very helpful.
“Preparation is really important. If you don’t prepare a business now before it comes to market, the chances are it simply will not get sold, and if it does get sold then there could be a lot of value left on the table.
“The preparation can be vast and it depends on the size of business, what part of the market and what sector you’re in. It can take a good three, four, five months to prepare a business thoroughly.
“It’s about having those conversations, understanding what it actually looks like – financial modelling, diligence packages, all the boring stuff – but really starting to get your head around it, getting people on board to help you with that and take some of the burden away, because there’s a hell of a lot to do and the worst thing you can do is take your eye off the ball and the company itself. It can be a very distracting process.”
Ultimately, though, the rewards of selling your business are achieved the same way as how you built it up to succeed – by putting in the hard work. And remember, a company sale does not have to be done all by yourself. Far from it.
Having a top-ranked adviser like KBS Corporate on your side means you can hand over much of the time-consuming administrative tasks involved in a business sale, as well as the most difficult aspect – finding exactly the right buyer to not only be the right fit for your company and staff, but who also has the capability to grow it further and deliver on any unfulfilled potential.
As the UK’s No.1 mid-market company sales adviser (source: LSEG) we apply proven expertise throughout every stage of the process and have unparalleled buyer reach, maintaining a network of thousands of acquisitive contacts around the globe who are seeking trade, private equity or alternative investment deals.
Regarding the process, and the all-important preparations business owners can make, George Barnes, KBS Associate Corporate Director, explained: “A business sale can be very demanding, so we act as lead advisers to refine the process and facilitate a comfortable experience.
“Selling a company is an ongoing process and having the most recent financial information and operational updates can help us to communicate the key selling points to buyers.
“Understanding the latest developments within a business allows us to negotiate from a better position, leveraging continued growth and the current financial performance.
“We pride ourselves on understanding what buyers are looking for, and this is reflected in our acquisition opportunities when the time to approach the market comes.”
If you would like more information on how to go about getting everything in place for the sale of your company, contact us confidentially on 0161 258 0118 for a free, no-obligation discussion with a member of our experienced team.