Relaxed Business Owner

Selling Your Business

Make your business attractive to buyers

When the time comes to sell your business, you need an FD by your side. This may be the first and only time you sell a business, but all our Finance Directors have a wealth of first-hand experience in both buying and selling businesses. They understand what a “savvy” buyer is looking for and are aware that people who buy businesses don’t just look at one deal. On the contrary, they look at a whole bunch of them. This means you need to make sure that your business stands out well from the crowd in order to seal the deal. We make sure this happens.

Your advantage is knowing that most sellers don’t do the proper preparation to make the sales process easy and transparent for the buyer. This often results in perfectly good deals falling through simply because sellers haven’t created enough certainty in the mind of a buyer as to what they are buying, and that the price represents fair value. Assuming you have a good business, one which people should want to buy, your primary objective is to win over buyers by having everything ready in advance. Address any obvious negatives as well as accentuating the positives. This is where a strong FD will make the difference.

 

“Sell your business in the same way you would sell your house.”  That’s perhaps the greatest insight we can give from the many years that The FD Group has been helping business owners get the best deal. Most people wouldn’t dream of letting a prospective purchaser near their home without cleaning it up first. The same should be true for your business, except that it takes much longer, normally 6-12 months, to make ready for a business exit. With a strong focus on the financials, have an FD who is experienced at preparing a business for sale working with you during this period.

Maximising exit value means making sure your business stands out:

  • Sell at the right time: Sell when things are going well and leave some upside so the purchaser is excited by the opportunity.
  • Be prepared: Make it easy for a purchaser to buy. Have all the numbers, information and explanations ready in advance.
  • Want to sell: Commit fully to the process and keep your emotions in check.
  • Have systems & processes: Make it so that your business is not dependent on you.
  • Develop recurring income: High recurring and contracted income streams will make a business more attractive.
  • Intangible assets: Identify and highlight what makes your business special.
  • Retain key staff: Involve and incentivise key staff in the run up to the sale.
  • Appoint experienced advisers: Skimping here is a false economy.
  • Seek competing bids: More buyers in play will lead to a higher exit value.

No-one knows more about your business than you. But buyers’ representatives always want to understand the detail of the business financials. An experienced FD from The FD Group on your team will be able to answer their questions, speak “their language”, and present the best picture for you.

Your broker has found a buyer and you’ve agreed a price. Job done? Unfortunately, not. This is just the start of doing the deal. Many offers fail to complete after acceptance and the longer the sale process takes, the greater the chance of this happening. Not all buyers have the funds to do the deal. And those that do have funds available will want to pay as little as possible at completion to minimise downside risk and reduce the initial cash outlay.

Until a deal is agreed, the buyer will not commit resources to carrying out detailed due diligence. Any unwelcome surprises or matters previously undisclosed and found during this process will not be looked upon favourably. Our FDs make sure that there are no surprises. This shortens the timeline, reduces the likelihood of a buyer pulling out and increases the money a buyer is prepared to pay at completion.