THE 6 STAGES OF SELLING YOUR BUSINESS
Getting the best price and securing the perfect buyer for your company is the final step after having built a successful business. – If you’re thinking about selling your business, here are our 6 steps to a successful company sale.
This provides a comprehensive review of your business’s cash flow and projections to show where the company is going and involves a period of preparation and information-gathering based on market-knowledge and research; giving you a good feel for what you might achieve in a sale.
This is considered a pre-due diligence check and will include a review and verification of corporate documents, current and historical financial statements, assets and liabilities, employee contracts and potential legal issues arising from a business sale, tax obligations and records, external contracts with other suppliers etc, insurance liabilities and past claims.
By identifying these early in the process, without buyer pressure, you can correct issues in good time and secure further value in your business.
Going to market is about finding the right buyers at the right time and protecting your confidentiality. It’s a timed combination of marketing and initial negotiation that should, ideally, bring multiple buyers to the table
Part of this involves pre-qualifying prospective buyers and securing nondisclosure agreements. At this stage, it’s a case of carefully eliminating buyers who are more interested in company information than a legitimate acquisition.
There will be a lot of buzz at this point, and by providing clarity and consistent timelines and expectations with multiple potential buyers is crucial until you find the best fit, and what’s important to you. The purchase price is only one point of negotiation, there are a host of negotiating factors that will require careful management and advice on both sides.
5. AGREE HEADS OF TERMS
This is the complex document setting out the core components of the deal. It will set out the purchase price (subject to the buyer’s due diligence process) and the deal structure and may include some expectations about the legal terms that will apply to the deal.
This is the stage when all of the documentation related to the transaction is approved in their final form. Together, both the buyer and the seller teams will be working through legal and financial requirements to ensure everyone is on the same page, appropriately protected, financed, and ready to close within the timeframes set out.
Venture Corporate Finance is a middle-market M&A advisory firm for clients planning to sell their businesses, raise capital, restructure, or grow with acquisitions. We provide independent advice and bespoke transaction solutions to meet their specific objectives.
For more information on corporate finance and M&A services, contact Venture Corporate Finance.