THE OBSTACLES TO SELLING YOUR BUSINESS
Arguably, a business is the most important and treasured asset in any business owner’s life. When they come to the point that they are ready to sell, most often they discover that they are not prepared for the intricacies associated with the process.
AN EMOTIONAL ROLLER-COASTER
Firstly, selling a business is very emotional and has numerous hurdles and obstacles to overcome before it goes through. It always means compromise from both sides and every detail of the business is reviewed and scrutinised, it’s tough – and it can cause severe mental exhaustion.
Having created and managed a business means having invested heart and soul in it. It takes a lot of time, effort and dedication. The owner has lived for the company, and when it comes to parting with it, he can feel taken by fear… fear of separation, fear of the unknown. What will life be like without the company? How to reorganise one’s life without it?
Thus, a business sale can be extremely difficult to manage and is filled with uncertainty and fear, the reality is that many other practical hurdles and pitfalls must be overcome to complete the sale of a business and do so effectively.
Let’s discuss a few of the practical challenges that one will face as they proceed through a sale process:
A substantial commitment of time and resources is spent by the owner during a business sale, which can be a huge disruption from an operational point of view. They often lose their competitiveness, perhaps market share, profitability and/or fail altogether. For those owners that have decided to go at it alone, many have done so to the detriment and value of their business.
There are specific obstacles that must be taken into account when marketing a business, yourself.
Bearing in mind that confidentially must remain paramount; a marketing package must be compiled in such a way that it includes all vital information a buyer will need to make a true assessment; this is far more difficult than it might first seem. One simple yet massive logistical challenge is dealing with the volume of incoming inquiries and the qualification of each one, and owners are taken by surprise by the huge commitment, thus rendering many are unable to take on this challenge while still operating their business.
MANAGING THE PROCESS
Should an owner receive an offer for their business, he/she will be faced with a set of new challenges. The intricacies of a deal structure, negotiating, legal issues, due diligence and the management of huge amounts of documentation, just to name a few. The process comprises of many tasks, deadlines and professionals that need managing all the way to closing. Professional and in-depth oversight is key to mitigating any, and all risk; therefore, commitment and expertise is required to handle the extensive deal management that is needed to complete the transaction.
As you can imagine, selling a business is a hugely complex, time-consuming and emotionally draining process that requires a diverse skill set as well as strategic planning, expertise, market intelligence and absolute commitment.
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.