The Value of Giving Back
There are many reasons why business owners engage in Corporate Social Responsibility (CSR) programmes, and absolutely none of them involve increasing the value of your business to an acquirer. But, your CSR track record may be more than something for you to be justifiably proud of – don’t underestimate the value of giving back! As you start the process of selling your business, you may find it opens up new opportunities for leveraging the right deal with acquirers.
In a previous blog, we looked at 5 factors that will impact the value of your business… The jury’s out on whether CSR affects market values in monetary terms, but it is certainly another factor which is increasingly important to both vendors and acquirers. A strong track record in this area, therefore, may increase your desirability in an acquirer’s eyes – which could in turn have a positive impact on your Enterprise Value.
CSR is a business’ contribution to societal goals that make an impact, create values, affect lives, or other ethically oriented practices. CSR makes everyone feel good, and helps your staff feel like they are doing more than generating profit… CSR is also great PR and contributes to a brand’s reputation. This, in turn, helps to deliver differentiation in a crowded marketplace. We have talked many times about how acquirers are looking at more than just the bottom line when they are considering an acquisition. The strategic alignment, future goals, brand reputation and integration of a prospective acquisition is also highly significant. CSR can be an important factor in all these things.
Synergy has always been a key element of acquisition decisions, and it makes sense that CSR may be a significant desirability factor within synergy. This could either be as an element of strategic fit between organisations, or as an opportunity for an acquirer to benefit from already established CSR practices. Well-established trust and/or developed relationships with stakeholders via embedded and successful CSR practices, is understandably attractive.
A good example of the role of CSR in a successful acquisition is the recent Entrepreneur’s Hub-led deal for Alerter Group Ltd. Alerter is a technology company with CSR at its core, providing emergency communications systems for people with sensory and physical disabilities. It was important for business owner, Steve Haseldine, to find a home for his business that would remain true to his mission and maintain the societal benefit Alerter Group had delivered.
Alerter Group Ltd was acquired by Sdiptech AB (publ) a Swedish engineering company providing technical services and products for urban infrastructures. Alerter Group’s CSR credentials were significant in attracting Sdiptech to the deal. Read our case study Entrepreneurs Hub advises on the sale of Alerter Group to Sdiptech for the full story.
When you sell your business, it is critical to market to the right prospects and present its attributes in the most appropriate way. It’s also hugely important that you find a suitable home in terms of ethics and values for your company and staff. At Entrepreneur’s Hub, our experienced M&A Advisors work with you to develop a picture of your ideal acquirer, draw out the key aspects of your business which will interest them, and will continue to identify synergies and opportunities as the deal negotiations progress. We’d love to talk to you, free and in complete confidence, so why not get in touch?
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FAQs – Selling Your Company
How do I sell my business in the UK?
Selling a business in the UK typically involves preparing financial information, obtaining a valuation, identifying suitable buyers and negotiating the terms of a sale. Most owners work with an M&A adviser to manage the process confidentially, approach qualified buyers and maximise the value achieved.
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
What is my business worth?
A business is typically valued by applying a multiple to its sustainable profit, often EBITDA or adjusted net profit. The appropriate multiple depends on factors including growth, recurring revenue, customer concentration, management strength, owner dependency, market conditions and buyer demand.
Determining what your business is worth involves more than applying a simple formula. Use our Business Valuation Calculator to obtain an initial valuation range, or read our simple business valuation guide to understand the factors buyers consider.
How long does it take to sell a business?
Selling a business in the UK typically takes around 12 to 18 months from initial preparation to completion, although some transactions may be quicker or take longer. The timeline depends on business readiness, buyer demand, deal complexity, due diligence and how quickly the legal terms can be agreed.
Preparing accurate financial information and organising key documents in advance can help reduce avoidable delays. Read our complete business sale timeline to understand what happens at each stage.
When is the best time to sell a business?
The best time to sell a business is usually when it is performing strongly, its future growth is clear and you are not under pressure to complete a sale. Buyers are generally more attracted to businesses with rising or stable profits, reliable financial information and credible opportunities for further growth.
Business owners are often in a stronger position when:
- Revenue and profits are growing or consistently strong
- Financial records are accurate and up to date
- Future growth opportunities can be clearly demonstrated
- The business is not overly dependent on the owner
- There is a capable management team in place
- The owner has started preparing well in advance
Market conditions can also affect buyer appetite and valuation. Factors such as sector growth, access to finance and competition between buyers may support stronger deal activity, but preparation and business performance are usually more important than trying to identify a perfect month to sell.
Ultimately, the best time to sell is when both you and the business are ready, and the company can demonstrate sustainable performance and future value to potential buyers.
Use our Exit Readiness Tool to assess how prepared your business is, or read our guide on when to sell your business for further guidance.
Do I need an adviser to sell my business?
You are not legally required to use an adviser to sell your business, but many owners appoint an experienced M&A adviser to help manage the process. An adviser can prepare the business for sale, identify and approach suitable buyers confidentially, coordinate negotiations and support the transaction through due diligence.
The right adviser can also help create competitive tension, protect your time and reduce the risk of avoidable mistakes. Read our guide to choosing the right business sale adviser to understand the different types of support available.
How do I prepare my business for sale?
Preparing a business for sale involves strengthening its financial performance, reducing risk and making sure it can operate successfully without heavy reliance on the owner. Buyers will also expect accurate financial records, clear contracts, organised documentation and evidence of future growth.
Preparation should ideally begin well before approaching the market, giving you time to address weaknesses that could affect value or delay the transaction. Use our Exit Readiness Tool to assess how prepared your business currently is.
How is confidentiality protected during a sale?
Confidentiality is protected through controlled information sharing, anonymised buyer approaches and non-disclosure agreements. Potential buyers usually receive limited information at the start of the process and must sign an NDA before commercially sensitive details are released.
Prospective buyers should be assessed before receiving further information, with documents shared gradually according to their level of interest and credibility. A well-managed process also allows the business owner to retain oversight of who is approached and what information is disclosed.
What documents do I need to sell my business?
The documents needed to sell a business commonly include financial accounts, management information, forecasts, customer and supplier contracts, employment records, tax information and evidence of intellectual property ownership.
Buyers may also request details of property, insurance, legal disputes, regulatory matters and company ownership. Organising this information before due diligence begins can reduce delays and help maintain buyer confidence. Our Business Sale Due Diligence Checklist explains the main information buyers are likely to request.
What’s the quickest way to sell a company?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
What’s the best way to sell a business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…
How can I increase the value of my business before selling?
You may be able to increase the value of your business by improving sustainable profits, developing recurring revenue and reducing reliance on individual customers or the owner. Buyers also value capable management teams, reliable financial reporting, scalable operations and clear opportunities for future growth.
The earlier you identify the factors affecting value, the more time you have to make meaningful improvements. Use our Business Valuation Calculator for an initial indication of value and our Exit Readiness Tool to identify areas that may need attention.