In the UK, July and August are traditionally slow months. Except for of the leisure and hospitality industry where the summer months are one of the busiest times of year, during school holidays colleagues are away, workloads become lighter, and the general pace of life calms down. When you have accepted an offer to sell your business, taking your foot off the gas is the last thing you want to do – at any time of year. Buyers and sellers alike would much prefer to keep the momentum going. Switching off is not an option.
Watching a business sale or purchase flatline can be frustrating, especially if you are working towards a personal deadline, e.g. retirement or a planned holiday. There may also be professional or commercial reasons why you would like the sale to continue apace, such as the need to relocate, expand, or attract new financial investment.
In this blog, we are going to explain some common reasons why a business sale may stall, and how appointing a business broker can help mitigate the risks.
There are many reasons why a business sale might slow down or stall. Issues may come to light through due diligence, external funding could fall through, and economic conditions can change causing financial uncertainty. For this post we will examine things from the human perspective. Let’s look at the people-related reasons why the sale of a business might lose momentum.
Where there is more than one director involved in running a business, each usually has an equal say in making decisions. This means when a director or managing partner goes on extended leave, important sale-related decisions cannot be made and progress may stall until they can be consulted.
While you cannot predict outcomes for every scenario, you can plan for this kind of situation before key decision makers take leave. Either agree on important decisions beforehand or empower the remaining director/s present to make decisions on behalf of the board. A business broker can add value by posing hypothetical ‘what if’ scenarios and recording the responses to inform future decisions.
Every professional has a lot on their plate. While your business sale might be your top priority, solicitors, accountants and other advisers all have their own agendas. Keeping everyone on track takes skill, sensitivity and experience.
When the professionals involved in a business sale revert to ‘go-slow’ mode, having a business broker on your side can be a godsend. Part of a broker’s role is to liaise with all parties and keep everyone on track to achieving the end goal. They will do all the legwork, enquiring about progress, prompting for responses, and maintaining the momentum, so every task is completed. Imagine how reassuring it would feel going away on holiday knowing that your business sale is in such safe hands.
Sadly, life throws a curveball every now and again, and business partners and decision makers sometimes get sick. You cannot plan for unexpected illness, but you can put the right structures in place to limit the impact of sickness on your business sale. Having up to date documentation, such as Shareholder Agreements and Articles of Association, should enable the remaining directors to make decisions in another director’s absence. In the most difficult circumstances, illness may dictate the need to speed up the sale process, in which case having a broker who is not emotionally involved, can be invaluable.
When key players in a business sale don’t see eye-to-eye, the sale process can lose momentum and trust between parties starts to erode. Arguments can easily arise over finance, e.g. who will pay for a survey to be carried out, or where one party feels the other is withholding important information. It’s not uncommon for larger boards of directors to disagree so much, they are unable to reach a consensus. When this happens, a business broker can step in to smooth the waters and calmly mediate matters to help everyone come to an agreement.
Similar to illness, big life events on both sides of the deal naturally divert people’s focus and attention, which may slow down business sale progress. Births, deaths and divorce have all been known to put the dampers on business sales. Our local business brokers have experienced every kind of life event and their impact on business sales, from a two-week delay for paternity leave, to the untimely death of a director jeopardising the sale. Without a business broker to advise and guide you, it can be difficult to know how, or even whether, to proceed in such circumstances.
At Business Partnership our business brokers are independent and impartial. We look after the interests of the buyer or seller who has appointed us and immerse ourselves in all aspects of the sale, keeping track of every tiny detail. Having access to this level of information helps maintain momentum whilst key people are on leave or unable to engage in negotiations and decision-making.
If we have clear instructions and are authorised to do so, we may act on behalf of our client, taking decisions whilst you take that family holiday or focus on maintaining business as usual. This means you can take the break you deserve and still be confident that your business sale is progressing in the background.
If you don’t want to see your business sale or purchase grind to an unexpected halt, appointing a business broker could be the right decision. Our fixed fee package offers peace of mind and reassurance that tackling any of the issues discussed in this blog is included in our service. Book a complimentary call with your local broker to talk through the process of selling or ask for help and advice if your business sale has lost its way.
It is imperative that you know, like and trust your broker, so you can work together to get your business sale or purchase over the line and in line with your objectives. Contact your nearest office and start the conversation today.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.
Whether you’re selling, buying, or planning for the future, Business Partnership is here to help. Contact us today to speak with your local Regional Partner and start your journey toward success.