You’ve taken that killer business idea, nurtured it over the years and eventually grown a successful enterprise, and now you’re keen to sell up and move on to whatever’s next.
This is where things can get complex, and there’s plenty to consider. Fundamentally though, business owners in this situation who think and plan ahead give themselves a clear advantage and are more likely to see both a higher financial return and be able to better shape the kind of deal they want.
With that in mind, here’s a quick guide to help you get the most out of your hard work on the business, and negotiating a sale.
As a seller, you’ll need to think carefully about the type of buyer you want to attract, and the benefits, or otherwise, that they may bring to the deal, such as —
You’ll also need to consider what the sale actually comprises. Is it assets or shares? A specific part of a larger business? Perhaps you’d be keen to exclude property from the sale, because the full value of this property may not be reflected in the price if it’s based on a multiple of profits, or because the purchaser has funding constraints.
Another thing to think about is whether you’d want to exclude certain assets such as intellectual property rights, and licence their use to the purchaser in turn: realising a greater return on investment.
In the same way that each purchaser and business is different, so will be the reasons for choosing to buy. They could include —
What’s clear is a great deal isn’t always about the best price: a number of other factors are undoubtedly important too such as attracting the right buyer — one with the right reputation, culture and ability to inspire trust — in a deal that works for both parties.
And that all starts with solid preparation.
This article originally appeared in The Leader in December, 2018
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