Are you ready to exit?
Deciding to sell your business is most likely the biggest decision you will ever make as a business owner.
Careful thought and planning is vital if you want to succeed. Making your business as attractive as possible to allure prospective acquirers attention is critical.
Albeit you think your business would be an attractive opportunity, you need to demonstrate value for these buyers. Below you will find tips that can help you achieve the best outcome.
What do you want to achieve?
Gaining clarity on what you want before starting the exit process is paramount to the transaction. You should have an idea of who you would like to purchase your life's work. Just anybody is not going to cut it. Is the reason for the sale to maximise value? Maintain family heritage? Preserve the culture? Now the right time to exit? Is there motivation to remain involved and experience the growth investors can finance?
If you are unable to answer these questions now, then start to think about what you want. If you know the answers to the above then you are on the way to a successful sale.
Can you take a break?
Day to day I speak with business owners heavily involved with their companies. If you are relied upon, it is time to reduce this dependence!
The acquirer must know and be provided with confidence the business can continue to succeed in your absence. Prepare and install a second tier management team if there is not one in place already. Freight & logistics providers are people businesses so step back and make sure you have experienced management in place that can assume responsibility for these key relationships. This will only enhance the value of the company.
Early planning significantly increases the chances of a successful outcome. Preparation puts the seller in a strong position. Think like an outsider, identifying key risk areas and take steps to ensure these risks are mitigated against. Have ammunition prepared to receive a favourable price for your business.
Being able to provide accurate, timely financials is imperative to a smooth transaction. Preparing forecasts and making comparisons is a good place to start, you should encourage your team to get in to the habit of this. This goes hand in hand with having a strong finance director who has a clear understanding of professional reporting systems and technology that improve financial management. If confidence can be secured by investors the transaction is less likely to slip up during financial due diligence.
Keeping the financial's up to scratch assists the process, but portraying the story of your business helps the acquirer understand the peaks and troughs you have experienced. Most importantly, it helps them understand the plan for the future. The underlying focus of your "story" should be what separates you from your competitors, and focus on what drives your success.
During the sale process, it is critical to keep the business running on its trajectory. Transactions are complex and highly emotional but you should aim to minimise the impact on your employees and ensure key client relationships are maintained. This is hard, albeit important to ensure value is solidified for the potential purchaser.
You need to understand the business's value drivers, industry benchmarks and market trends to ascertain what you can expect prior to the process begins. Many factors effect the value of your business that are not in your control. You should note this and be prepared.
When you are ready to transition, you should be confident everything is prepared to allow the transaction to progress. If you have thought about the above points, the rest should take care of itself.