Interesting question – I find when I’m talking to business owners, the question of succession and exit frequently comes up in the conversation.

Owners understand that a profitable, systemised business with a history of solid repeat forward orders, will likely command a good sale price. By asking probing questions it often becomes clear that while they understand that principle, the reality is the business falls short in some key areas and the business becomes a ‘hard sell’ at a lower price than anticipated.

First a realistic strategic plan is needed to put a good succession/exit together which will be a win-win for both parties. Two things happen – you receive the best price and the buyer has a good business.

All too often an owner looks at selling when they see profits falling and their enthusiasm and passion has waned to a point where they have no energy or desire to make the changes to improve, but still hold the vision of a high selling price.

Timing your decision to sell is often crucial as it allows you time to develop and put in place strategies that will improve the value for ‘best price’.

Being ‘sale ready’ often requires an independent third party to review ‘whole of business’, that’s people, processes and financial state, to highlight any potential areas of concern and eliminate to improve value.

Determining a suitable marketing strategy involves a number of well-planned stages including:

  • Being in the best ‘sale ready’ position.
  • Deciding on sale strategies and identifying the target buyers
  • Providing a documented value proposition to include:

–  Documented business systems

–  Developed business profile

–  Establish the rationale for the value you determine

–  Independent business valuation

–  Business plan and a due diligence checklist

–  I.M. (Information Memorandum). Highlighting to the potential buyer, the benefits of the business as an investment opportunity

  • Drafting Heads of Agreement following conclusion of negotiations

Planning well ahead with time to execute any actions to improve the value of your business is a sound policy which helps to eliminate the stress of a sale process.