Introduction to Business Sales

The sale of your business is very often the final business transaction many owner managers will undertake, whilst there are serial entrepreneurs who are involved in many businesses, to many you only sell your business once. It often comes after many years of hard work, and will provide you with funds for your retirement, it is therefore essential that if you are to maximise the value of your business you plan well in advance. A business that has been well prepared for sale will achieve a higher value than one that has not, this can amount to a significant amount, therefore it is essential you think about your exit from the business today, even if you think it is a long way in the future.

ibv bring a pro-active approach to preparing a business for sale and the sale process, having been personally involved in a number of situations, where it was our money at stake. This has involved the sale of businesses to other corporate buyers, MBO/MBI situations, sales to PLC’s, and sales involving Private Equity firms.

It is important that you run your business efficiently and plan well ahead, this will maximise your value. Planning many years in advance (especially from a tax point of view) can increase the net value you receive for your business, so that whatever the circumstances of your disposal you will be prepared to maximise the value. Businesses often get approached to be acquired, therefore having the right structure and having planned at an early stage for the eventual disposal will assist in these situations to maximise your value.

Some of the key areas that will determine the value you will obtain for your business include:

  • The level of profitability
  • The state of the market
  • Any unique products or services that you provide
  • Having strong long term commercial contracts in place
  • The number of willing buyers
  • The level of preparation you have made for the sale (often called grooming)
  • The quality of your management team

Selling a business can be emotional and time consuming, you have to get it right! Having pro-active advisors who can handle all aspects of the process so you can continue to focus on running the business is vital.

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