As a business owner or manager, there are a number of 'levers' you need to control to successfully manage working capital and drive a successful, cash-generating business.
When choosing a broker to help sell your business, there are three key elements to look for:
- Experience in your industry and in selling businesses of your size and ‘shape’
- Project management expertise
- Communication skills.
Selling a business should not be like exploring an uncharted continent.
When embarking on a business sale you’re not just taking yourself, but you must also bring along your business partners, staff and advisors for the journey. It’s a massive undertaking and not one to be entered into lightly.
Don’t go exploring on a business sale unless you at least know where you want to end up.
This week's infographic is for those just setting out on the business sale journey, and step 1 is about being honest with yourself regarding why you're on this journey to help you determine where you need to go.
After the process of finding a buyer and selling your business, there is a good chance you’ll still need to turn up to work for a period of time.
Conditions of a sales agreement often include requirements for continuation of service for a transitional period. This involves working alongside the new owner for a set period to share information and knowledge of the business.
When buying or selling a business, the last thing you want is a handover whereby the business performance is negatively impacted by transfer issues not planned out ahead of time and dealt with appropriately.
There are several important issues a vendor and, by definition, a purchaser need to consider and deal with in the transfer process leading up to settlement.
There is quite a bit of interplay and overlap between the issues but, for the purposes of this blog, I have separated them into seven categories:
Over the past few years we’ve produced a number of resources to help our readers and clients navigate the business sale journey.
For the record, Step 1 of selling is always the same: Ask yourself ‘what is my objective in selling?’ Why you are selling needs to be very clear in your mind, and the minds of your spouse, shareholders, business partners and so on, in order to set yourself up for a successful sale.
At the other end of the selling process is ‘sealing the deal’ and this is not without its challenges. The cheat sheet below introduces some of the tools we use to manage information flows during the detailed due diligence process and, ultimately, seal the deal.
When selling a business, you need to provide solid, robust and transparent information to support the performance of the business if you want to attract a confident purchaser who is willing to bid up strongly.
The more clearly you can describe your value proposition and present supporting information in the business sale process, the more chance you have of driving business value. Remember, for a business person, information can reduce risk and, therefore, increase confidence.
The following infographic is a simple guide to 10 key pieces of information you need to share when selling your business.
Seeking to exit a business just a few weeks or months after making the decision to do so, is not the best way to optimise value in a business sale.
As I explain in this video, it’s much wiser to incorporate exit and succession plans into your ongoing business planning and prepare for a sale over a period of several years.
The JPAbusiness Strategic Value Checklist has been created to help you drive positive strategic value in your business.
Don't wait until it's time to sell or exit to work on the business characteristics listed in the checklist. While strategic value drivers are not always quantifiable (as we discussed in our free eBook Strategic Value in a Business Sale) they’re not fairy dust either. They can’t be created with a magic wand overnight!
Strategic value drivers result from real actions you can take to enhance year-by-year earnings in your business, and also potentially assist you to capture extra value on exit of your business.
When selling your business, it’s important that you value the information you have put together on the business and don’t just share it with anyone.
I would advise working with a broker or advisor who is sensitive about how they share your information and who actively uses a prequalification process in dealing with potential purchasers.