There are key areas which time and time again prove critical in maximising value, if these are managed well you give yourself every chance of achieving a premium on exit.
Preparation
This starts well before the sales process begins, it's likely to include each of the points below, the first step often is simply committing to the decision to put timelines on your exit plan.
Finding the right buyer
Sometimes the buyer will approach you as they've identified your business as a good fit for their particular criteria, more often, time and research are needed to identity the right buyer for your business, this may be a competitor or a supplier or simply an investor looking for opportunities to deploy capital.
Information
High quality, timely and accurate Information is critical to maximising value and ensuring the transaction completes. If the buyer cannot get comfortable with the details and supporting documents underlying the reasons why the business is attractive to them, many will seek a price reduction or reconsider the transaction.
Timing
Business valuations are subjective and can be volatile, wider macro conditions such as general economic sentiment and interest rates can impact business valuations significantly. Economic cycles are beyond your control, but being aware of them will help you plan the timing of your exit.
Shareholder alignment
Where a business is owned by multiple shareholders, some of whom may be less involved in the day to running of the business, it's a good idea to make shareholders aware of the potential for sale early on to ensure that there are no objections and to manage expectations in terms of value.
Where circumstances arise that shareholders do not agree on the key points of a proposed transaction, this can make completion very difficult or impossible.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
