Preparations for Sale that Truly Make a Difference
A whole sub-industry has grown up around corporate transactions. Sometimes this preparation activity is called ‘grooming’ for sale. I went through a phase in my life where I thought that all such activity was irrelevant. This prejudice was fed by the numerous horror stories I came across. I recall a client in Cheshire telling me about spending £250,000 on grooming his business. It turned out that none of the potential purchasers his accountants identified cared about any of the changes they had themselves initiated! This provides me today with my first key point. “Do not make changes to the business that a purchaser does not care about, or that they can institute more cheaply than you.” My second point follows rapidly on: “Find out what a prospective purchaser will care about and do that!
Do not make changes to the business that a purchaser does not care about
A simple negative example of what I am seeking to convey is that of Credit Control. Early in my career, I worked in an excellent firm that had poor credit control. Some attempts were made to improve over a couple of years, but it was sold with that still a real issue. The multinational purchaser had it sorted in a month – by just dropping in their own highly effective systems. In conversation with the new General Manager, he told me that the issue was part of the attraction of the company. What was to them a minor adjustment brought rapidly accelerated payback. However, if all likely buyers for our firm had instead been private companies with limited resources, such a fault would probably have left it unsold. Proper preparation thinks into the shoes of the most likely buyers.
Find out what a prospective purchaser will care about and do that
Much later I was working with a logistics firm to establish their ‘value proposition’ for acquirers. They were quite negative about their proprietorial load management software. I had to fight to keep it on the list. The eventual buyer sneered at the trucks, the management, and the customer base, but went all quiet when evaluating the software. It turned out that theirs had cost £2m and still barely functioned! The target company was reversed into the much bigger operation and assumed its control functions! So, next points: “Some of your weaknesses are strengths. Some of the things to which you give little value, matter a lot to others.”
Buyers buy future results by turning their back on unmanaged risks
However, what people will never buy are unresolved court cases, warranty issues, untried technology, shoddy HR practices, etc. “Buyers buy future results by turning their back on unmanaged risks.” Nobody wants to buy risk. Acquirers can produce enough of that themselves without your contribution! All company preparation for sale should contribute to risk mitigation. By the way, perceived risk is as bad as actual risk. Much of your preparation may need to be around making sure that there are no misconceptions. Large companies find it particularly hard to evaluate SME customer bases, for instance. They look for big names familiar to them and can baulk if they are not there. So, do the hard work of showing how your own client base will work to their advantage – or improve it!
Some of the things to which you give little value, matter a lot to others
I do not understand today why I thought that preparation for sale was non-vital, other than the very real abuses of twenty years ago. (Advisors who would lose their client if the client sold, constantly finding further areas to groom – at a hefty daily rate!). Most crucial is absolutely up-to-date input as to what matters and what does not.
If you’d like to find out more about mitigating the risks and selling your business for the right price and best terms, please contact us.
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FAQs – Selling your company
What size of businesses do you work with?
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What sectors do you specialise in?
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What about some free advice?
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Can I do it myself?
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How long does the process take?
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Nullam cursus lectus nec leo ultrices malesuada. Donec euismod sodales arcu quis lobortis. Mauris vel nisl sollicitudin, efficitur enim non, lobortis nulla. Aliquam lobortis dui a turpis fringilla, eu fermentum augue rutrum. Quisque sit amet aliquam erat. Aenean eu augue felis. Vivamus sodales sollicitudin urna, sit amet fermentum dolor imperdiet ac.
Cras in purus ut eros semper interdum vitae id orci. Suspendisse pellentesque ligula ut lorem ornare malesuada.
Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed hendrerit risus vel faucibus tristique. Suspendisse ac gravida nisl. Duis ac libero et est malesuada dapibus. Aliquam id libero vel nisi convallis lacinia.
Nullam cursus lectus nec leo ultrices malesuada. Donec euismod sodales arcu quis lobortis. Mauris vel nisl sollicitudin, efficitur enim non, lobortis nulla. Aliquam lobortis dui a turpis fringilla, eu fermentum augue rutrum. Quisque sit amet aliquam erat. Aenean eu augue felis. Vivamus sodales sollicitudin urna, sit amet fermentum dolor imperdiet ac.
Cras in purus ut eros semper interdum vitae id orci. Suspendisse pellentesque ligula ut lorem ornare malesuada.
Lorem ipsum dolor sit amet
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed hendrerit risus vel faucibus tristique. Suspendisse ac gravida nisl. Duis ac libero et est malesuada dapibus. Aliquam id libero vel nisi convallis lacinia.
Nullam cursus lectus nec leo ultrices malesuada. Donec euismod sodales arcu quis lobortis. Mauris vel nisl sollicitudin, efficitur enim non, lobortis nulla. Aliquam lobortis dui a turpis fringilla, eu fermentum augue rutrum. Quisque sit amet aliquam erat. Aenean eu augue felis. Vivamus sodales sollicitudin urna, sit amet fermentum dolor imperdiet ac.
Cras in purus ut eros semper interdum vitae id orci. Suspendisse pellentesque ligula ut lorem ornare malesuada.
Are you a business owner looking to sell your company?
FAQs – Selling your company
How do I sell my business?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell my business?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
How do I sell my business quickly?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
Can I sell my business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…