Selling Your Business
Most business owners are relying on selling their business to retire, whether this is through an IPO, trade sale or the transition of ownership to family members and management.
Wide and varied research suggests that 70% of small to medium sized business owners will be looking to exit their businesses over the next ten to fifteen years. Unlike the majority of smaller businesses, most medium sized businesses are capable of attracting buyers. The objective then is to be prepared before the process commences, so the best possible outcomes can be achieved.
Optimisation of the sale price will be based on many factors that will influence the purchasers view of the value of the business to them.
The major drivers of value are as follows:
While the method of sale may determine the relative importance of optimising the sale price (i.e. transitioning the business ownership to family members), independent purchasers will ruthlessly assess each of these areas in order to determine what they believe the business is worth.
In rare circumstances competitive tension may drive up offers from competing parties. The ultimate price paid, however, will come down to due-diligence and the assessment of each of these factors.
As so many service providers will attest, businesses need to be prepared for the process to ensure they achieve the best possible outcomes for all stakeholders.
The M-Institute can facilitate the independent appraisal of the value and saleability of the business and also identify the obvious sale optimisation initiatives that can influence the process.
Often a good start is to understand the business sale process so the owners can make better decisions and plan for the future.