Preparing your business for sale....

For lots of business owners, selling a business is the long-term aim and the payback for all the long hours and the personal sacrifices made along the way.

There are several thousand businesses sold each year in the UK and the factors surrounding these are varied and will range from those which are highly orchestrated to those where a requirement for business sale has arisen unexpectedly.

The day-to-day running of a business will naturally take precedence over planning a potential sale. It is however important to invest a small amount of time and resources into planning an exit. Even if this day never comes, there is no harm in making sure your business is an attractive proposition in the marketplace.

The initial exit planning steps are not expensive nor time consuming. The difference these can make to the end game can be substantial. Possessing an exit plan is proven to help get owners and their business into a good place, improving the prospects of sale and the financial returns that can be achieved.

EXIT PLANNING

EXIT OPTIONEERING

Understand the options….

There are several different ways you can exit from your business, understanding and thinking about these options early and deciding on which could best work for you and your stakeholders is important. Depending on your preferences, this may lead to a different set of enablers in your exit plan and will help get you thinking about life after sale.

TIMING

The balancing act….

You should attempt to time the sale of your business to optimise the outcome from both a personal and business perspective. A movement of a few months can sometimes make a big difference, especially if this coincides with the renewal of a major customer contract, or to span a period of uncertainty or capitalise on a change in legislation or taxation. Achieving a happy balance between personal, business and economic timings can be tricky, however it’s worthwhile trying to optimise the point of exit not least to establish which constraints take priority over others.

SHAPING UP

Leave yourself enough time….

Getting your business to a good level of readiness for sale will without question add lots of value. During the process of sale, the inner workings of the business will be laid open for the buyers and their advisors. Requests for large amounts of information will be made and then analysed.

Having an early understanding of what this process entails allows owners to make adjustments to normal working practices to make sure this information is being collected and continues to remain at hand. More importantly, it's what this information means to potential buyers or investors that ultimately goes on to influence the attractiveness of the sale. An information or sales memorandum is created, and this will function as your prospectus to potential buyers.

The information memorandum is your chance to provide an accurate view of your business and pitch this perfectly so that it’s not over or under stated. It will need to convey the right messages and make it easy for others to understand why the business is an attractive investment prospect.

ENGAGE

Excite potential buyers….

Finding a buyer, the right buyer takes time. Having a good business advisor onboard will make this easier, one which understands your business, the market and is able to articulate the features and opportunities relevant to your business. Business advisors will profile the ideal buyer candidates for you and have access to networks of differing types of potential buyers.

The way acquisitions are financed can influence how owners exit a business. It is therefore useful for owners to understand and have an appreciation for the many available methods buyers can finance a deal. You may be surprised to know the more common ways of financing an acquisition often include a deferred consideration, leverage lending from banks or specialist lenders, invoice financing, equity funding, asset financing or a combination of these.

SALE

Mobilise your team….

Once you’re in a place to commence the sale process, you’ll need to mobilise the support needed to progress the sale. Having good legal, accountancy and business advisor support is essential.

Some aspects of the sale process will occur more quickly than others and there will be an ever-increasing amount of information exchange and depth of analysis undertaken. The final stages of the process can feel intrusive and at this point, the earlier preparations you’ve undertaken really pay off and will improve the way and speed on how the deal is closed.

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We are an independent consultancy business offering professional and advisory services to the UK's utility and energy sectors.

Our knowledge and expertise in the UK gas & water markets make us the ideal business advisors for those looking to exit their business.

If you think we can help you, please reach out to us directly at sales@xecpro.co.uk or submit your enquiry on our contact page.