A well-prepared business exit aligns the owner’s goals with a realistic valuation, organised records and a workable handover plan. Patience and specialist advice can help manage negotiation and due diligence, but neither guarantees a buyer, a price or a completion date.
By Tony Vaughan · Published · Updated · Last reviewed
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Business planning involves not only starting, growing and making a profit, but also preparing to exit or sell. In reality, many entrepreneurs become fixated on immediate success stories and do not consider the significance of the sale process. This results in flawed exit strategies which eventually falter, causing disappointment and frustration.
It's a common misconception that a business sale is a swift, straightforward process. Inspired by one-off success stories in the media, many business owners succumb to the illusion that a quick sale will just as easily be their fate. However, this couldn't be further from the truth.
Avoid shortcuts and unrealistic sale timetables
This section considers avoid shortcuts and unrealistic sale timetables.
Preparing a business for exit, running a sale process and completing a handover are distinct stages. Preparation may take years where substantial changes are needed, but there is no standard three-to-five-year transaction timetable. Rushing unresolved financial or legal issues can increase execution risk.
Prepare records and personal expectations
This section considers prepare records and personal expectations.
Selling a business is not just a financial decision but also an emotional one. It's critical to be mentally prepared for the process and its potential outcomes. Business owners should prepare for the worst to avoid the sting of disappointment and frustration. Setbacks and delays are common in the process of selling a business and should be anticipated.
A thorough, well-prepared exit strategy is the antidote to hasty, poorly planned . This includes a clear understanding of your business’s value, a realistic timeline, detailed documentation, a solid succession plan, and professional financial and legal advice.
Understand what professional advice can do
This section considers understand what professional advice can do.
A common mistake many business owners make is attempting to navigate the process alone. This is where the role of a knowledgeable broker and adviser becomes invaluable. They provide guidance, reduce stress, save time, and can often negotiate better deals.
An experienced broker or adviser can help assess buyer expectations, organise the process and negotiate terms. Appoint solicitors and tax advisers for specialist matters; professional involvement does not guarantee a premium price or completion.
Keep control of sale decisions
This section considers keep control of sale decisions.
The key takeaway is this: Do your research and take control of your business sale. The process of selling a business is complex and time-consuming. Being proactive and understanding the process thoroughly will put you in a position of control, allowing you to make informed decisions that will enhance your business's value.
Prepare for uncertainty, allow time for decisions and seek advice where needed. A considered approach can help you assess setbacks and offers against your objectives, without guaranteeing a particular result.
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Understand your options before deciding. If you would like to discuss your own circumstances, you can request a confidential business exit review; enquiries are reviewed by experienced advisers who can discuss suitable options.
Common questions
Why can rushing a business sale create problems?
Unresolved financial, legal or management issues can emerge during due diligence and weaken negotiations. Preparation helps identify those issues before buyers review the business.
Does finding a buyer and handing over always take three to five years?
No. Long-term preparation, the sale transaction and any post-sale handover are different phases. Their duration varies with the business, buyer, funding and agreed terms.
What documents should I organise before approaching buyers?
Start with reliable accounts, management information, key contracts, ownership records and evidence of operational processes. Your advisers can tailor the information request to the proposed transaction.
How should I respond if negotiations stall?
Identify whether the obstacle is price, evidence, funding or deal terms. Review your alternatives with advisers rather than accepting a poor fit simply because time has already been invested.
General information from our archive, not personal advice.
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