Taking a company from a start-up to a successful enterprise ripe for acquisition is a key objective for many businesses. So it should come as no surprise that, although managing the sale of your business can be an exciting step, it comes with its own set of challenges. Once youve decided the time is right to sell, here are my top tips on how to manage the process.
Getting ready to sell
To get the most for your company, plan the potential sale in advance. Ideally, think about the process several years before to maximise value. It never hurts to be prepared and ensuring you have your accounts in order will also help you run the business day-to-day.
Study every part of your business from the perspective of a potential buyer. Look at your company for flaws that you would criticise in your competitors. Your accounts, brand, business plan nothing should escape observation. This will ensure potential buyers have a good first impression of your business.
Make sure you also have up-to-date accounts and cash flow statements. If there are any anomalies, ensure they can be easily explained. The time this takes will pay off in the event of a sale by providing added value to the buyer, which will be reflected in the price.
Finding a match who’s right for you
When you start receiving bids dont feel pressured to accept the first offer. If there is at least one interested party, the odds are that there are probably more.
If you plan to stay on in your business there are some key points to consider. Find a buyer that shares similar cultural and commercial values to your business. When Bonnier approached us we knew they were the right kind of company. As I planned to continue as CEO, it was important to work with a company that had a good balance of commercial and family values. So when an offer came in from Bonnier I knew it was time to meet with them and talk business.
Come to the table prepared
Your company will fare better by coming to the table fully armed. Make sure you know from the start how you want a potential deal to look. Equally, be ready to walk away if the right deal doesnt materialise.
Discussions that involve the future ownership of a company you may have spent years building can be emotionally charged. Remember to stay calm during these talks and decide your priorities in advance. To minimise conflict, it is sensible to decide where you may be able to compromise and where you have to stand firm.
Stay mum until the deal is done
Before finalising the deal, it should be business as usual for staff, customers and suppliers. Any uncertainty can damage business relations and spook the buyer. Far better to announce that you are selling once the deal is completed.
Be clear about your reasons for selling. It may be you were made an offer you can’t refuse or you may feel that the business and staff have better prospects under a new owner. Whatever the reason be sure to communicate any substantive changes to working practices that can be expected as part of the deal.
And finally, allow plenty of time. The process of managing a deal as large as the sale of your company will be time consuming. Make allowances for time spent away from running your business and put systems in place to ensure everything runs smoothly while the deal is done.
John Styring is co-founder and CEO of IglooBooks.