Selling a business which you have spent years building can be a difficult and emotional task not to mention time consuming.
Often one of the best outcomes is to sell to your management team. This is usually much less disruptive and easier to achieve than looking for third party buyers. Suggesting a Management Buy-Out is often a good way to incentivise a management team who will ultimately reap the rewards.
But if this is not possible, you will need to be patient and plan carefully. It takes time to achieve the desired result and best practice is to continue to run the business as if it was not for sale.
Rishi Ladwa, a lawyer in the corporate and commercial team at Withy King based in Swindon, offers a few guidelines to help with the process:
- Think about your key objectives. For example, do you want to sell by a certain date? Do you have a target price? Do you want to continue to run the business?
- Then assess what steps you can take to make the business as attractive and low risk as possible to potential buyers. For example, can you demonstrate a good, solid financial record? Do you have robust systems in place? Are your employment contracts and policies up-to-date?
- Once your house is in order, you will need to begin marketing your business to potential buyers. Identify potential candidates and establish the best ways to contact them, directly or through an intermediary. You will need to prepare a sales memorandum as part of the process.
- Ensure you ask potential buyers to sign a confidentiality agreement before you start discussions. Weigh up a good offer against a properly financed offer. Establish whether the buyer will pay for the business up front or in deferred payments.
- The buyer will undoubtedly instruct accountants and solicitors to inspect your business. The deal will need to be properly and thoroughly documented. Be careful to choose advisers who specialise in selling businesses and can guide you through the process.
For further information or a confidential discussion about succession planning or selling your business, please contact Rishi Ladwa at Withy King on 01793 847777.
Pictured above: Rishi Ladwa of Withy King