5 tips to managing the business sale process - Crowe Ireland

5 tips to managing the business sale process

06/10/2021
5 tips to managing the business sale process - Crowe Ireland

In a changed business landscape, many business owners see now as the perfect opportunity to exit. If now is the right time for you, what's your next move?

For most business owners, their largest and most important asset is their business. As a result, there are few more important considerations when building and growing a business than the owner’s eventual exit.

Selling a business is time-consuming and for many, an emotional venture. The process can be lengthy and stressful and you need to be in control of each stage of the sale from start to finish to ensure you maximum your return. 

Crowe’s corporate finance and tax teams have a wealth of experience guiding business owners successfully through the sale process. 

Top 5 tips to successfully manage a business sale

1. Find the right advisors
To achieve a successful outcome, you need to prepare for your exit. There are complex legal, financial and tax implications that need to be considered and planned. So it is paramount that you find the right professional advisers, who understand your requirements and strategic goals and who can guide you through the steps to a successful sale.

Buyers want as much transparency as possible and will perform detailed due diligence. Spending time to properly evaluate and present your company’s financial and business history and future projections is a crucial element in the sale process. As a seller you can avoid red flags by working with your adviser to ensure that everything is in order and that the right information is provided at the right time, to facilitate a smooth sale process. 
 
2. Maintain momentum

The importance of maintaining momentum cannot be underestimated. To successfully conclude a transaction, you must be committed to the process and have the resources to move efficiently through the stages of the transaction. It is vital to pre-empt buyers concerns and be in a position to respond to their queries promptly. This will ensure that you are always on the front-foot and in control of the process. Spend the time prior to going to the market to refine and prepare for the process to come.

3. Create competitive tension 
By creating a competitive environment to buy your business, you can drive up price, achieve better terms and a quicker transaction timeframe. You can create competitive tension through a carefully managed and well-executed sale process which attracts multiple competing acquirers. Even if you are dealing with one party, you can maintain a strong negotiating position by being clear that if they don’t put their best offer forward they won’t get the deal. 

Using an experienced adviser to lead the transaction should ensure that you create the right environment to get the best outcome. 

4. Protect your business
To sell your business you may need to provide sensitive data to interested parties regarding revenue analysis, key contracts, employees and operating structures. In most cases, the interested parties will include some of your competitors who are eager to expand their own business. To protect the inherent value in the business, ensure that information is only shared with qualified parties who have signed a non-disclosure agreement (NDA). You should withhold commercially sensitive data until late in the sales process, when it is more probable that the transaction will complete.

5. Compare offers
When selecting a preferred buyer, price will be a key criterion. However, it is important that you critically compare all aspects of competing offers to ensure that they are assessed on a like-for-like basis. Offers may contain earn-out provisions and contingent consideration. Equally there can be working capital or cash-free / debt-free adjustments. How robust is the buyer and how are they going to finance the acquisition? These are all relevant factors when weighing up competing offers. 

Given the stakes, it is vital that you are well informed regarding the specific terms of each offer and that you have all the necessary support and expertise to enable you to make a clear and objective decision. 

Our corporate finance team has extensive experience assisting SME clients prepare their business for sale and providing guidance through the different steps of the process. If you are considering selling your business, contact a member of our corporate finance team.

Read our article Five tips for successful acquisitions

Naoise Cosgrove, Managing partner - Crowe Ireland
Naoise Cosgrove    
Managing Partner
Corporate Finance
Brian Geraghty, Partner, Audit - Crowe Ireland
Brian Geraghty
Partner, Audit
Gerard O'Reilly, Partner, Audit - Crowe Ireland
Gerard O'Reilly  
Partner, Audit
Partner, Corporate Recovery - Crowe Ireland
Aiden Murphy  
Partner
Corporate Recovery

What's your next move?

A new environment calls for a new approach. Make your next move count.