16 September, 2011
As with most things in life selling your business is about preparation. This is the key to a smooth running transaction with a successful outcome. Plan your exit strategy well in advance of any prospective sale. This means that when you come to sell, your business is set up to maximise your return and hopefully limit complications. If your exit strategy is something that you have not planned, some of the worst consequences could be failure to maximise price or some nasty taxation issues.
As with any negotiation there will be give and take along the way and it is important to know from the outset what your deal breakers are. A transaction that falls through is more than likely as a result of having unrealistic expectations from the outset. If you own the business with others it is important to have discussions between yourselves to establish your respective views before you commence negotiations with a third party. Failure to do this could mean that you end up negotiating between yourselves rather than with the buyer.
You could run a transaction yourself, but getting the right professional advice from the start is invaluable. The right advisors ought to result in you saving money in the long run by protecting your sale proceeds from claims by the buyer following completion. Although every deal is different the process is similar and your advisors will know the potential pitfalls of legal documentation.
Once the parties have been introduced, the next step would be to agree the fundamentals of the transaction. This important phase draws out major issues and therefore if a deal is going to fail you will know sooner rather than later which equals a saving in time and money.
The process of selling a business is not easy and the seller will have to spend a lot of time providing information about the business to the buyer. This can be an exhausting process but open and honest communication should lead to a smoother transaction and ultimately satisfying result.