The sale of a company is a natural step in the cycle of any business. But once you have decided to sell your business, your next actions will have a direct impact on the level of success you achieve, and your entire future.
You will want to consider when to sell, how your stakeholders are going to react to this change and what you will do once the business has been sold.
Develop a plan dealing with who will be responsible for each part of the sales process, and how developments will be communicated. That way, you can be sure to stay on the right track. Where there are skills gaps in your own team, use the consultancy service at BHP to ensure the entire process runs smoothly. Put the right ground work in at the start, and the entire process will run a lot more smoothly.
Make Sure Everything Adds Up
Your financial metrics are going to be a key tool in marketing your company to its best advantage, but also in knowing when to sell. Two of the most prominent indicators in any business are the revenue performance and profit performance.
If you have just had a good year with strong returns, it can be the ideal time to sell your business. However, if projections anticipate a fall in revenue and profit during the sales cycle, you may want to rethink your timing.
Conversely, low profit and revenue figures may mean a business will not achieve the return expected solely from the stats. Therefore, a greater level of communication, and further information, will be required to convince potential purchasers of the company’s appeal.
Keep Your Eye on the Target
Just as you do in marketing your own products or services, the way you present your company to market will dictate when you sell, and to whom.
For a quick sale that frees up funds in a hurry, a financial buyer will be your target audience. Therefore the value of the assets in the company, and revenue figures, will be key selling points.
However, if you are looking to sell to a more strategic buyer, focus on information exchange and long term profit goals. Look at the business from the eyes of your target buyer, and ensure your marketing message is aimed accordingly.
There is always some level of compromise when it comes to pricing your business.
As an owner, you want to gain the greatest return for your asset. Yet at the same time, the company still needs to be able to maintain a stable level of performance, once the sale has been completed.
If you are uncertain of how to value your business for sale, attend one of our workshops or book an appointment with a consultant. An accurate valuation will ensure the greatest level of interest with the greatest level of return.
Stay on Track
During any business sale it is imperative to keep focused on the objectives and critical path of the sale process. However, this should not be at the expense of the business itself.
A company sale can cause uncertainty for employees, for customers, for you the vendor, and even for the buyers themselves, and only by ensuring the business continues to run smoothly can some of that uncertainty be eradicated.
The entire sales process can take a considerable amount of time, but if the management team do not maintain a constant eye on all elements of the day-to-day practice, any surprises or unforeseen changes could devalue the company, or even jeopardise the sale altogether.
You must also consider your future direction, and what part, if any, you would like to play once the sale goes ahead.
With a carefully laid out plan, the sale of a business can be relatively pain free, and incredibly profitable. Just make sure you have the support of the professionals to enable you to get it right.