Good preparation is half the battle! If you are considering selling your business, you need to start preparing in time. As explained below, this takes time, sometimes several years. This post will address three important points of focus for preparation.
The X-ray
Make an appointment with a corporate finance adviser for an "X-ray" of your company. It could be someone at an accounting firm, or at a corporate finance firm. These advisers are experts in valuing your company and are brought in to "put the company in the shop window", find the right buyer for you and guide the sales process. The first step is to have the business valued and screened for any areas for improvement. It often turns out that it would be a good idea to wait with the sale for a while, because you first need to manage the working capital better, for instance: such as reducing an excessive stock, optimising the debtors/creditors position and better planning the necessary financing. It is also conceivable that it would be wise to continue the growth trend for a few more financial years first, so that you can later show a more credible growth potential than the well-known "hockey stick". The X-ray of your company will help you, together with your corporate finance adviser, determine what can be improved so that you optimise the value of your company before putting it up for sale.
Getting things in order
A buyer of your business is going to investigate the financial, tax, legal and commercial aspects of your business. You want to look good, so you want to make sure everything is in order. Is the registration at the Chamber of Commerce still up to date, or does that new director still need to be registered? Are your accounts in order and can you produce reliable figures periodically? Does your business comply with environmental regulations? Are the contracts with your key suppliers and customers still up to date? Do you follow the collective labour agreement that is binding for your industry? Is your company's intellectual property adequately protected? A company where everything is in order gives confidence to a buyer, prevents costly surprises and makes the sales process more efficient.
Independence
Is your company still very dependent on your expertise? Do you mainly maintain customer relations yourself? Are you still fully responsible for day-to-day management yourself? Make sure your company can stand on its own feet. Strengthen management, transfer relationships, spread your knowledge and responsibilities within the company and distance yourself more from day-to-day management. Buyers will have more confidence in the sustainability of your company's success if it can stand on its own two feet!
Your business is sales-ready when you have learnt from the X-ray, put your house in order and when your business can stand on its own two feet.
Are you on the eve of a sales journey?
Selling a business often starts years before the actual transaction. Do you want to know where your main opportunities and risks lie? We map out with you how to best prepare your position for a successful sale.
