From a seller’s perspective, many businesses are now on an upward curve, buoyed by an improving economy, and can demonstrate strong historic financials and impressive (supportable) forecasts. As everyone is aware, a good time to sell a business is when it is “on the up,” with good prospects and a strong pipeline of work.
However, not every would be Vendor has been through the sale process before, and often first time business sellers are unprepared for how complicated and resource consuming the disposal of a company can be. In order to make the process smoother, and ultimately as valuable as possible, it is imperative that preparation for an exit starts at an early stage. Some issues to consider include:
· Whether your financial information is up to date and accurate? Have your forecasts been independently ‘sense checked’ and critically assessed?
· Do you have a strong second tier management in place? Are they incentivised and ‘locked in’ through an EMI or similar share scheme?
· Are you prepared for third party Due Diligence? Do you understand what this actually entails?
· Have the shareholders taken steps to minimise their tax exposure on an exit? Tax planning needs to be considered at the earliest opportunity.
By addressing these and other key issues and preparing your business to be transaction ready you will be able to maximise the value and minimise any potential pitfalls.
2015 may well turn out to be the best time in a number of years to sell a company, but regardless of which side of the fence you sit on, seeking advice on deal preparation, deal structuring, valuation, due diligence, tax and legal matters from corporate finance experts is a prerequisite to ensure the best possible outcome.
If you are considering your options for 2015 with regards to a possible exit, then contact us for a confidential discussion today.