We’re operating in a business buyer’s market. This means vendors who are keen to sell their business must be prepared to do some legwork to find the right buyer and achieve the most profitable outcome. Identifying untapped business potential and possibilities for future growth is one tactic vendors are using to achieve a higher valuation and attract prospective buyers.
Identifying growth opportunities is not about creating additional work for your leadership team. You don’t have to create and execute a business development strategy in order to sell your business. The seed of an idea, a customer commitment, or detailed research could be enough to add significant value to your business in the eyes of a buyer.
Buyers are looking for strategies that will lead to sustainable business growth. If you plan to sell and exit your business this year, researching what that growth could look like is a good place to start.
Buyers perceive value in opportunities to scale a business, so keep this in mind as you carry out your research.
Consider existing customer feedback as a primary source of information about customer needs and wants. Analyse online reviews and feedback on social media for hints of challenges and problems customers would like your business to solve. For example, travellers tend to be very honest in their review of a hotel or accommodation, pointing out where their needs have not been met, which could highlight untapped potential.
Would your customers be responsive to a feedback survey (not all are)? If so, carefully worded questions could generate valuable suggestions for future products and services. And, if you change your mindset and look at customer complaints as an opportunity rather than a threat, they can be a goldmine for feedback.
If you sell online, take a look at your website analytics and identify which products/services are popular and not so popular. Which products or services are people searching for on your website, but perhaps not finding? Review other sales channels to understand whether there is potential to expand or enhance your product/service mix for your customer base.
Evolving markets can be a source of new opportunities. Stay flexible so your business is ready to respond to change.
We all have plans that we have shelved because we realised our team didn’t have the skill set or knowledge to deliver. Resurrecting these as part of your growth strategy could be attractive to a buyer who does.
Have an open conversation about your plans and float the idea of developing a long-term partnership – which may even become the source of new ownership.
Part of a broker’s role is to help vendors achieve the most profitable sale price for their business. If our initial valuation doesn’t match with yours, we can work with you to identify ways to increase value from the perspective of a buyer. Find your local business broker and ask how we can help.
Beyond current performance, buyers are looking for clear ways to scale the business, such as:
Clear gaps in the market: responses to customer challenges and pain points that may emerge from your research.
New untapped markets: look at market trends your competitors might already be exploiting and get yourself a piece of the pie. Expanding into overseas markets may also generate higher demand and profit.
New product lines: think complementary products and services, add-ons, upgrades and diversification to spread risk.
Digital upgrades: in software and systems may improve flexibility and responsiveness, and generate higher return on investment.
Subscription models: highly valued by buyers, avenues to generate regular income are sought after on the business sales market.
When you sell a residential or commercial property, one sure-fire way to increase its market value is to apply for planning permission to extend. There are several ways you can highlight potential business growth to buyers in a similar way.
Even if, under current ownership, you have no plans to pursue growth, identifying viable expansion paths and creating plans to highlight the business’s potential may justify a higher asking price.
Having determined the areas where a new owner may seek to scale the business, create a strategy documenting your ideas, research and potential for growth. Include agreements in principle with significant customers or suppliers, and evidence of predicted return on investment. Hand this to interested buyers to create interest, impress and excite them about the possibility of owning a company with scalable prospects.
To add value your business and achieve the most profitable sale price, follow our three steps:
Consult a Business Partnership broker to explore and identify untapped potential buyers find attractive. Complete our contact form to arrange a conversation.
UK businesses are getting accustomed to managing unexpected events. We’ve had the curveball of a global pandemic followed by economic instability, and the threat of cyberattacks, financial crime and extreme weather events. And that’s before you add serious staff illness or unexpected death to the mix. When you consider that 50% of businesses experiencing a disaster will fail within the following 12 months, managing a business is not for the faint-hearted!
Unforeseen events and crises can be catastrophic if you do not plan for them. When you own a business, there are lots of events you can’t control. The key to surviving the uncontrollable is to put protections in place before you need them. Whether you manage a local family business or an expanding UK operation, check what protections you should have in place and review them regularly to ensure they meet your needs.
A combination of good planning and relevant insurances will protect your company in times of crisis. In this article, we look at the options to mitigate the impact of unexpected events in both these areas. Let’s start with planning.
Articles of Association set out the rules of running a limited company. Every director must agree to these rules and responsibilities and behave in a way that represents the best interests of the business. They protect a business from disputes and govern its management. Most company directors adopt the standard Articles of Association when setting up and registering their business. Over time and as companies grow, you may need something more specific than a standard cover-all. If your business is growing or seeking new ownership, it might be wise to consult a solicitor and seek professional advice.
Have you ever considered what might happen if a plane were to crash into your building, or a flood caused business operations to shut down? Your company should have a Business Continuity Plan in place to enable key business operations to continue functioning in the event of an incident. Working through the consequences of an incident with your team will help identify vulnerabilities and weak spots. You can then take action to reduce business risk in these areas.
As part of your plan, consider the key members of staff that need to be involved in an incident response. Your plan should set out who those people are, their role, responsibilities and contact details.
Continuity planning is not just for big companies. Every business needs to do some level of contingency planning, for example, what happens if the office boiler breaks down during a cold snap or the latest storm takes the power out from your manufacturing facility? With extreme weather events becoming more frequent, it makes sense to put plans in place.
When it comes to selling, having a robust business continuity plan shows potential buyers you have assessed and planned for potential risks. It builds confidence that your business is a sound and profitable investment.
A shareholder agreement defines the roles and rights of shareholders and sets out how the company is run. A valid shareholder agreement can prevent disputes in the event that a shareholder chooses to leave the business. Shareholders may also refer to it for guidance if a shareholder were to fall ill and be unable to vote in major business decisions, such as a decision to sell.
A buyer may request evidence of insurance during the due diligence phase of a business sale. Having accurate, valid policies in place will present your business in the best light.
Protecting the assets that belong to your business is essential. Your branding, trademarks, imagery, literature, software, patents and copyrights all hold significant financial value. Software developers, manufacturers, product designers, and businesses in technology and the creative industries may benefit from having intellectual property insurance. Cover can protect against loss of income and finance the legal costs of defending your IP rights, if a case arises. In the era of AI, IP insurance has become a vital piece of protection.
Keyman insurance protects your business against financial loss caused by the temporary or permanent loss of a valuable team member. This could be:
Death in service insurance protects your business if an employee dies while on your payroll. Policies usually pay a tax-free lump sum to the deceased’s nominated beneficiary. In larger companies, death in service is a popular employment benefit.
A director’s insurance policy provides cover for individuals with decision-making powers. In the event of an unexpected loss of a director, the insurance payout would enable the remaining directors to hire someone to perform their role, make key decisions, and keep the business running smoothly. This type of cover can be invaluable to protect against the unexpected when selling your business.
According to a UK Government report, just over 4 in 10 businesses reported a cybersecurity breach or attack in the last year. The estimated average financial cost per breach is £1,600 – and that’s purely based on the incidents businesses choose to report. The cost of a major incident can be much higher.
Cyber insurance can protect against financial loss in the event of an online attack, but this shouldn’t be your first line of defence. Staff training could prevent an attack happening in the first place. As part of your planning, consider the financial crime, scam awareness, and online safety knowledge gaps you need to fill.
Planning to protect your company from crisis is a sign of a well-managed business. From machinery breakdowns to the loss of a key employee, investing in planning and insurance can mitigate the impact of unforeseen events. And with so many businesses failing following a catastrophic event, you could see your livelihood disappear all too quickly.
Securing the right level of insurance cover and reviewing your policies regularly to ensure they meet your needs is good practice. A business that has considered information and financial security represents less risk than one that has not. Having robust continuity plans in place gives potential buyers extra peace of mind.
If you have questions about business protection or what insurances you might be asked to evidence during the due diligence phase of your business sale, find your local business broker or contact us here.
Sometimes imagining the worst can be the best thing you can do to protect the value of your business – for the present and a future without you.
Your partner has been begging you to take a break from work for months. But how can you? The business you have built relies on your knowledge, experience and resources to function. Its growth and profits are all tied to your personal input and achievements. Taking a holiday could jeopardise everything you’ve worked hard to create, couldn’t it?
If you believe you can’t step away from your business, even for the shortest amount of time, how will you ever be in a position to sell it? Businesses which are heavily reliant on their owner to function are much less valuable in the market. If you feel too tied to your business to take a break, it’s time to start making changes to allow your business to operate without you. If you don’t act now, your stubbornness could impact both your personal relationships and risk a future business sale.
In this blog we pull together four common owner objections to taking a break, and explain how to counteract them. As a helpful aside, if your partner has been nagging you to take a holiday, maybe you should share this with them too! It always helps to have someone supporting you through change. Failing that, contact your local business broker.
Apart from sounding a bit self-centred, this is categorically untrue. Your people are a valuable asset, in fact your employees are one of the most important factors when selling a business. Having an experienced team in place is often the biggest factor that makes a business stand out to prospective buyers.
There will be people in your team that you rely on and trust. Train them up, share your knowledge and keep building that trust until you feel confident to leave your business in their hands. Take them through the operational and financial management tasks you do that are so important.
If you don’t employ someone who could take over your responsibilities and allow you to step away, recruit a manager to fill that gap. Failing to do this could be putting your business at risk. You will never be able to take a relaxing holiday, let alone build sufficient value to sell your business. Can you afford not to explore the possibilities?
They key to this one is to create systems and processes your team can follow to manage the business in your absence. If something was to go wrong, they should be able to resolve the situation without you.
These days we are so well-connected through technology, it’s easier to take a break knowing you could get involved if you are really needed. Video calls, cloud-based systems and access to live data provide the comfort some of us need.
If you are genuinely concerned about something catastrophic happening whilst you’re away, start local. Choose a location from which you could travel to work, if needed. Test the waters with a long weekend and build yourself up to a longer stay. You’ll never look back!
Business leaders should be responsible for the high-level, strategic activities that will take your business to the next level. If you find yourself constantly involved in daily decision-making, firefighting or problem-solving minor issues, these are signs you need to delegate.
Before passing responsibilities to your management team, you first need to establish a robust business structure. Employees need to know who to turn to if they need help making a decision – not you! With careful planning and clear communication you can gradually hand over specific tasks and activities and free up time to take a break.
You can when you have a business broker who’s on your side. Selling your business can be a long and demanding process. Without the services of a business broker you can expect these effects to intensify.
Appointing an experienced, recommended business broker to facilitate your business sale means there is someone acting in your best interests whilst you are on holiday. Someone you can rely on to handle the due diligence requests and trust to answer buyers’ questions in your absence, and keep the deal moving. When you are entering into the business sale process, you may not ever imagine taking a holiday during such a critical period. Entering into a sale with a business broker by your side changes everything. You could be by the pool with a mojito before you can finish voicing your objections!
Taking a break from the business you have built should not impact negatively on business operations. With a skilled team in place, a robust structure, processes and clear communication, every business owner has the freedom to have a holiday. In fact, it is one of five ways to build value in your business.
Ask yourself which pieces are missing from your jigsaw?
Buyers want reassurance that your business can operate without you. So learn to take a break! If you crave freedom and are ready to sell your business, search for your local, friendly and experienced Business Partnership broker and ask how we can help.
We are all so used to being always-on and connected to our work, sometimes we forget the business benefits that come from taking a break. Improved health and wellbeing, time for reflection, planning and idea generation are some of the biggest.
The smartest business owners are already travelling the world, enjoying new experiences with their families, whilst their business grows and gains value in their absence. Don’t be the owner who is chained to their business forever. Step away and see what happens.
When you sell your business, should you continue to work there?
It’s an important aspect to deliberate during the sale process, and while there’s no one-size-fits-all answer, there are several factors to consider. It depends very much on your situation and the necessary terms of the deal.
Here we look at all the key considerations so that you can make the best decision for you and your future, and that of the business that you’ve spent years to build.
Firstly, it’s essential to understand the buyer’s expectations, which you will establish during the negotiations. Many buyers prefer the former owner to stay on board for a transitional period to ensure a smooth handover. This period can vary from a few months to a couple of years, depending on the complexity of your business and the buyer’s familiarity with the industry.
For buyers, having the previous owner involved can provide a sense of security. You, as the seller, possess intimate knowledge of the business operations, key relationships, and industry nuances that can be invaluable during the transition. Your continued presence can help maintain stability, reassure employees and customers, and preserve the business’ value.
Of course, your reason for selling will always impact how important this is to you, but in most cases understanding the buyer’s perspective will help you get the most value from the sale.
If you do stay on, know your role, and make sure the new owner does too.
Will you be a consultant, a part-time advisor, or will you remain in a more hands-on role?
Clarity in your responsibilities will prevent potential conflicts and ensure that both you and the buyer are on the same page.
Decide and agree on how long you will remain in the role too.
Selling a business can be an emotional experience. Continuing to work in the business post-sale can ease the emotional impact of the transition, providing a sense of continuity and closure. You can phase out your involvement over time rather than dealing with an immediate exit. However, sometimes an immediate exit could be best, depending on the situation.
An important consideration.
From a financial standpoint, staying on can also be advantageous. You could choose to structure the deal to include earn-outs or performance-based incentives, where you receive additional compensation based on the business’ performance post-sale. In such cases, you may want to remain involved to help ensure the business meets the set targets.
Consider your long-term goals. Do you have a new venture you’re eager to start? Are you looking forward to retirement, or perhaps you want to explore other interests? Your future aspirations should heavily influence your decision to stay or leave. Your financial position may also impact your decision.
Ultimately, whether you should continue working in the business you’re selling post-sale is a decision that you need to make based on a combination of factors—your personal and financial goals, the buyer’s expectations, and the needs of the business.
By carefully considering these elements, you can make a choice that benefits both you and the new owner.
At Business Partnership we can help you throughout the entire sales process. From a free valuation initially to advising you throughout the sale and finding you the ideal buyer.
There’s never any obligation and it’s always confidential. Give us a call on 0207 145 0040 or find your local partner here.
Deciding to sell your business is a big decision, both in terms of being mentally ready to move on to pastures new, and making sure you get the right deal for you. Years of hard work and dedication come down to this. This guide will look at some of the factors you need to consider, how to navigate the complexities of the sale process, and how you can make sure you do avoid the common pitfalls sellers can fall foul of.
Here’s how you can give yourself the best chance of achieving a smooth and successful transaction.
One of the biggest mistakes business owners make is not preparing adequately for the sale. This involves more than just deciding to sell; it requires detailed planning and organisation. Begin by ensuring your financial records are in order and up to date. Prospective buyers will scrutinise your financial health, and any discrepancies can derail the sale.
Additionally, gather all relevant documents, including contracts, leases, intellectual property records and statutory compliance records. Also question whether preparation needs to extend to your team as well – consider when the best time is to inform them that you’re selling and which team members need to know at which time. It’s vital to maintain operational stability, but there will likely be certain people who need to be involved to help you prepare from an early stage depending on the size of your business.
Overestimating the value of your business is a common pitfall that can lead to prolonged sale processes and frustration. It’s crucial to have a realistic valuation.
Get a free valuation today here from us.
We can help you assess various factors, including market conditions, financial performance, and growth potential. Securing the right deal is difficult, and it all starts by making sure that the asking price is right.
The sale process can be lengthy and demanding, often taking several months to find a buyer. During this period, it’s vital to continue running your business as usual. Neglecting day-to-day operations can lead to a decline in performance, which won’t help you attract potential buyers. Additionally, even after a potential offer for your business is accepted, it’s crucial to maintain focus and keep driving the business forward until the transaction has completed.
Have a think to see if you can delegate any tasks to colleagues whilst you focus on preparing the business for sale and the sale process.
Not all interested parties are suitable buyers. It’s essential to qualify potential buyers to ensure they have the financial capability and genuine interest in acquiring your business. Qualifying potential buyers saves time and money whilst making sure that you can give sufficient attention to the right potential buyers.
You can vet interested parties by requesting proof of funds and holding preliminary discussions to assess their seriousness and capabilities. You need to try and avoid any potential deal falling through down the line, especially if it’s taken months of work to get to that point. Vet potential buyers as early as possible.
Maintaining confidentiality throughout the sale process is crucial. Premature disclosure of your intention to sell can unsettle employees, suppliers, and customers, potentially harming your business. Again this comes back to taking the time to consider when the right time is to advise specific employees, as well as relevant stakeholders – which could be waiting until after the sale in some circumstances.
Negotiation is a critical component of the sale process, alongside making sure you’re actually negotiating with the right buyer in the first place.
It pays to get a professional in your corner as soon as possible to deal with both of these aspects – the search for your ideal buyer and the negotiation. Not to mention the rest of the complexities of the sale process.
Sell your business with Business Partnership.
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.
Call our team on 0207 145 0040 or find your local contact here.
Thinking about selling your business? It’s crucial to take the right steps to prepare, as this can significantly enhance the value of your business and ensure a smoother sales process. Whether you’re planning to retire or looking for new opportunities, following these seven steps will help you get your business sale-ready.
The time required to prepare a business for sale depends on your goals and how soon you want to sell. If you’re aiming to exit in a few years, you can take more time to boost your business’s value and gradually delegate responsibilities to ensure the business can operate without you. For a quicker sale, you may need to streamline the preparation process and focus on targeting the right buyers.
Start by identifying what you want to achieve from selling your business. Is your priority securing a specific price, ensuring a smooth transition for your employees, or completing the sale within a certain timeframe? Having clear goals will shape your strategy. It’s also essential to have conversations with business partners, family, or key employees to align everyone on your goals for the sale.
Before you put your business on the market, address any issues that could scare away potential buyers. Buyers will scrutinise your business, so resolve any legal disputes, tidy up company records, and ensure you’re up to date on payments. Unresolved problems could derail a deal, so consider involving legal or financial experts early to help iron out any concerns.
One of the first things potential buyers will ask about is your financial performance. Ensure your accounts are accurate and up to date. Be prepared to answer key questions, like your business’s return on investment, profit margins, and details about key suppliers and customers. It’s wise to consult your accountant to ensure everything is in order, as clear, organised finances build buyer confidence.
Knowing your business’s value is crucial. A professional business broker can provide a thorough valuation based on your financials, market conditions, and growth potential. This will give you a realistic idea of what your business is worth and help set an achievable sales price. The valuation will also highlight areas where improvements can be made to boost the sale price.
Based on the valuation, there may be opportunities to enhance your business’s value. This could mean upgrading equipment, investing in staff training, or improving systems to make the business less dependent on you. Strengthening your supply chains or customer relationships can also increase value. The more time you have before the sale, the more improvements you can make.
Once your business is prepared for sale, you’ll need a strategy to attract the right buyers. A skilled broker will help you market your business effectively, presenting it in the best light and targeting buyers who will see its value. Sales particulars should be carefully crafted to showcase your business’s strengths without giving away sensitive information. A clear, focused marketing plan will attract serious buyers and help secure a favourable deal.
The sale doesn’t end when a buyer is found. You’ll need to ensure a smooth handover by sharing your knowledge and preparing the business to operate without you. This transition period is key to maintaining business continuity and ensuring the new owner’s success. Your broker can guide you through this process, ensuring the handover is seamless and that the business is set up to thrive under new ownership.
Whether you’re just starting to think about selling or actively looking for a buyer, having an experienced business broker by your side is invaluable. A broker can guide you through every step, from valuation to marketing to the final handover. At Business Partnership, we’re here to help you navigate the complexities of selling your business and maximise its value.
(Originally posted 2021. Updated 2024)
Over the 40 or so years we’ve been selling businesses we have gained an understanding of the importance of targeting the right buyer – not only in terms of maximising value, but also the speed of transaction and protecting the legacy of what you have built. Below are some insights and strategies that we’ve experienced along the way that will help you pinpoint the ideal buyer for your business.
Let’s start with a clear understanding – embarking on the journey of selling your business is a significant decision and one that requires careful planning and strategic execution.
First and foremost, it’s crucial to recognise that not all buyers are created equal. Your business is unique, and finding the right match requires a thoughtful approach.
Let’s explore some key steps to guide you through the process.
Before you start searching for potential buyers, take the time to thoroughly understand your business and its appeal to different buyers. What makes it stand out? What are its strengths and weaknesses? Gain a clear understanding of your value proposition to effectively communicate the appeal of your business to your best potential buyers.
Know your numbers. Know your forecasts and the marketing plan they are built upon. Develop a clear, simple-to-understand winning pitch.
Consider the characteristics of an ideal buyer for your business. Are you looking for an individual entrepreneur, a strategic investor, an investment group, or perhaps a competitor seeking to expand their market share or to take you out? Clearly defining your ideal buyer will help you tailor your business sale marketing to make sure that you’re outlining the right benefits to the right buyer.
It also allows you to focus on what you want for the future of the business and enables you to focus your attention on targeting those who align with your vision and protect that legacy.
Understanding the market landscape is crucial to understanding who you should be targeting as potential buyers for your business. Analyse industry trends, competitor activities, and the overall economic climate. This knowledge equips you with the insight that you need to position your business as an attractive investment opportunity.
We touched on this earlier. Crafting a compelling narrative that highlights the unique value proposition of your business is a critical determining factor in securing a sale. Focus on the positives, develop the potential and paint a positive, captivating vision for the future, backed up with hard data.
Make your business emotionally attractive as well as showcasing it as an all-round practical investment.
Practice your pitch, refine it, and deliver it more effectively each time. Know it off the top of your head and inside out. Think Dragons Den, could you pitch your business effectively?
Seek the guidance of experienced professionals such as business brokers, financial advisors, and legal experts. Their expertise can be invaluable in identifying potential buyers, negotiating deals, and navigating the complex aspects of the sale. This professional support and guidance pays for itself when the right deal is secured as a result.
Confidentiality is paramount when selling a business. The premature disclosure of your intention to sell can lead to uncertainty among employees, customers, and suppliers. Are you protected before you tell trade competitors? Incorrect disclosure can negatively impact the value, so work closely with your advisors to implement a robust confidentiality plan that safeguards sensitive information until the appropriate time.
Building relationships within your industry can open doors to potential buyers. Becoming well acquainted with competitors can even lead to huge future opportunity.
Attend industry events, network with key players, be seen and heard online, and be part of all the important associations related to your business sector. Being seen as a thought leader attracts buyers and adds value. Often a personal connection can often be the catalyst that leads to a successful business transaction.
Of course, if you haven’t looked to do this to date and you’re looking for a quick exit find a broker with these connections instead.
A competitive sale (sealed bid) process creates value, but also be wary of buyers who want to have exclusivity or access to sensitive data before a deal has been agreed – do not give them that advantage.
Ultimately, finding the right buyer can take time, and then there are the negotiations and due diligence processes that follow. The journey will likely have its ups and downs so stay focused on the end goal with patience in mind. Be willing to adapt your strategy if it becomes evident that you need to in order to secure the right exit.
At Business Partnership we have over 10 regional offices throughout the UK, each with a local expert on hand to provide you with a free valuation and offer up advice. We can take all this work off your hands whilst securing you the sale and the financial future that you want.
There’s never any obligation and everything is confidential.
Call our team on 0207 145 0040 or find your local contact here.
Selling a business is a significant decision that requires meticulous planning and preparation. You may have been planning your exit for years or very quickly decided that you want or need to explore the sale of your business. Either way, there are crucial steps that you need to take if you’re going to first and foremost attract a buyer and then make sure that you’re in a position to negotiate the most lucrative transaction you can whilst securing agreement to the terms of sale that you want.
Here we’re going to look at how to navigate the process of preparing a business for sale so that you can get the best outcome.
Determine your reasons for selling and evaluate the ideal timing. Consider market conditions, business performance, personal circumstances, and your readiness to transition out of the business and what life after sale looks like for you..
Potential investors/buyers will always want to understand the current state of play and how the financial position of the company has changed over the past three to five years.
Get ready to be able to present income statements, balance sheets, company accounts, tax returns, cash flow statements, and any pending or recurring expenses. Developing a weekly management report of key performance indicators is also a key step.
Engage a professional business appraiser or consultant to conduct a valuation. Understand the true, present value of your business as early as you can. Seek the assistance of a professional who can not only provide a current valuation, but who can assist you with the rest of the process from here. A professional business broker will work with you to understand your current position and your objectives. They will be able to help you create a complete plan to get you from where you are now to where you want to be when it comes to completing the sale.
Make your business as profitable and efficient as you can. Look to pay off any outstanding debts, streamline operations, and resolve any legal or compliance issues to present a clean, uncomplicated financial picture to potential buyers.
Refresh your ‘front of house.’ Does your branding, marketing materials or premises need a facelift? It’s important to make sure that how you present the entire business is in line with what potential investors will expect and your strategic plans.
It may be that you’re thinking ahead of time and planning to sell in three to five years. This gives you an opportunity to prepare perfectly. Redefine your image, create new marketing and sales campaigns to facilitate growth, and freshen up the entire operation. Get all the necessary foundations in place so that a new owner can just hit the ground running. Do everything you can to maximise your business’ value and all-round appeal to potential buyers.
Document standard operating procedures, key processes, systems, and anything else that you need to showcase how your business operates day-to-day. A potential buyer will want to see a smooth, seamless operation at work.
Intellectual property can be a huge factor when it comes to building your value too. Organise all the paperwork you have relating to IP rights, trademarks, patents, copyrights and any other protections you have in place that could lead to future realised value for a buyer.
If you haven’t already been working with an advisor since your initial valuation, now is the time to get your team together to manage the sale and get you the best deal!
You will want an experienced business broker in your area to get involved at this point. Depending on the size and type of your organisation, you may also need them to work closely with your accountant and any relevant legal professionals.
Your business broker will:
At Business Partnership we can provide you with a free valuation today.
There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.
Call our team on 0207 145 0040 or find your local contact here.
Establishing an exit plan early in the life of your business is crucial if you are to extract the highest value from your investment of time and money. At Business Partnership, we believe a good exit plan will allow entrepreneurs to secure a high return on sales, whether the business is meant to provide an income until retirement, or you intend to sell your company sooner rather than later.
Most business owners do not understand the real value of an exit strategy and will often wait until something happens, or they want to sell their company before creating a plan. However, an exit plan is invaluable if you want to be in control of your future and extract the highest amount of money from your business’s sale. So, here are the top ten reasons why you should start working on that exit strategy sooner rather than later to eliminate any risks to your business.
Having an exit strategy in place will allow you to plan for your business’s future, help establish your goals, and create strategies for achieving them. For example, it will enable you to be in control of hiring the person who will come in and take over from you. You also have the foresight to know when to hire full-time employees or seek out freelancers.
Put yourself in a buyer’s position for a minute. You never bid higher than the estimated price of something unless you have to. As a seller, having an exit strategy will help you evaluate whether the presented proposal is good enough for your business.
An exit plan will help you gauge what your business is actually worth. Not the back-of-the-envelope guesstimate, but what you could potentially receive if you decided to sell. It will give you a thorough evaluation of your company’s financial position, intangible assets, potential buyers, and the respective market conditions will help you determine the value of your business.
The perfect time to sell is typically when your business is doing well; the financials are trending upwards, sales are booming, the team is strong and demand is high. However, with the current economic uncertainty, this is hard to predict. An exit strategy will help you identify a time to sell your business. With a definite period of operation in mind, you will be able to focus on developing the business and preparing it for sale.
Having an exit strategy is a sign of fiscal foresight and responsibility that makes your business more attractive to potential buyers. It shows you have set clear visions and goals for your company and you have dedicated your time and resources to ensure you achieve those goals. An exit plan also tells buyers that you are committed to selling the business and will not change your mind during transactions.
When you run a business, it is often your world, and it can be hard to let go of something you created. Therefore, it is understandable if you are having second thoughts about leaving. However, an exit strategy will help you prepare for departure by reminding you that you have achieved everything you set out to do.
Whilst we are currently in a buyer’s market due to the knock-on effects of the pandemic, an exit plan will help you pivot and adjust when you sell your company to achieve the best results. When the time comes, you will be well placed to exploit a strong seller’s market and receive the maximum offer for your business.
Exiting your business can be tedious, time-consuming, and expensive, as all the paperwork must be done from scratch. However, with a good exit plan, you will have completed all the proper documents and prepared yourself for the admin required to sell your business.
Your exit plan should consist of how much your business is worth and reasons why it is and will continue to be profitable. With this information present, you can negotiate and convince the buyers that they will yield high returns from your small business.
Whether you are leaving your business to start a new venture or looking to retire, the whole point of preparing for your exit is to give you the time to plan for life after the sale. Having an exit strategy in place will allow you the best opportunity to exit your business with the maximum value. So, think of an exit strategy as a blueprint for your future. With it, you can set goals for your business and plan ways to achieve them.
If you’d like to talk to someone about your exit strategy, call 0207 145 0040 or find your local office.
Selling your business could be one of the biggest changes that will ever happen in your life, especially if it’s a family business or a company that you built from the ground up. After all, if moving to a new house is in the top 5 most stressful experiences of a person’s life, then you can only imagine where selling your business ranks.
Yes, this is personal to you and your family! Do you know that 75% of business owners regret their exit one year after leaving? (The 2013 State Of Owner Readiness, The Exit Planning Institute) Why is this? The answer to this is largely due to owners neglecting their emotional preparedness to exit.
It’s therefore incredibly important not to underestimate the emotional impact that this sale could have on you and the people around you.
Business owners can go through all kinds of emotions when they are selling up. How you feel could depend on your reasons for selling and how well the sales process goes as well as on your personality. Some people cope with change well or are excited about their plans for the future, but others can find the process unsettling or upsetting. Your feelings could also change at different stages of the process.
Some common emotions that you might experience along the way include:
It’s not surprising that selling a business can be so emotional, because business owners have put in so much time, effort, and energy, often over many years. The people around you, including your family, employees, and even your customers, will also have an attachment to the business, so they could be going through a lot of the same emotions.
Recognising the fact that selling your business can bring up strong emotions is one of the biggest steps you can take towards managing the impact. Ignoring your feelings or dismissing them as unimportant can make you feel worse. You should give yourself some time to think about your feelings before, during, and after the sale. You might find it helpful to talk things through with someone you trust, whether that is a friend or the broker who is managing the sale. Making plans for the future can also help you to adjust to this big change in your life and give you something to look forwards to.
It’s also important to acknowledge the feelings of those around you. Failing to address any negative emotions could lead to them building up and breaking out at the wrong moment, potentially disrupting the sale. You need to, at the right time, get your family and employees on board to ensure they’re ready to welcome the new owner. You can help by providing a listening ear, keeping people informed, or getting their input on the sales process. You should also be able to rely on your broker when you need to have difficult discussions with employees, family members, or other interested parties. Having an understanding third party on hand to manage these conversations can help keep any strong emotions under control. Finding a way to commemorate everything you have achieved together can also be meaningful. You could show your appreciation by giving employees a memento of your time together or create a book or album to record the history of your family business.
Getting the right support along the way can make all the difference. You won’t feel as anxious about the sales process if you’re being guided by an experienced broker who has been through it all before. You will have someone to talk to if you’re experiencing doubts and you’ll get the expert advice you need to avoid making emotional decisions that wouldn’t be good for you or the business. It’s important to work with a broker who understands how you feel about your business and what you want to achieve through the sale. Your broker should find a buyer who you can trust to take on the business that you have worked so hard to build.
The same care and diligence that you have applied to building your business, should be applied to selecting the right business broker to make the exit journey as smooth and successful as possible.
Contact Iain or your local office if you would like some confidential advice around your business sale.
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.