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Countdown Actions to Considering a Business Sale

Almost half a year has swept past in a flurry of M&A activity with nearly £35M of deals currently being handled for various clients here at TheNonExec.  With eight company exits in play, I’ve spent roughly 30% of my time up in the air shuttling between buyer and seller.  Lufthansa & BA great.  Ryanair, well…

From my myopic viewpoint, the market for company owners wishing to sell continues to be strong.  Despite Brexit, there is a large body of Scandinavia, European, US and Asian companies looking to buy UK firms.  This year’s forecast for UK companies being sold is estimated at 3000, somewhat behind last years 3916, but still a healthy number. And with over 11000 global acquisitions announced in Q1 18, the industry is buoyant.

Valuations have always varied between sectors, with industries such as high technology commanding premiums.  But even with ‘conventional’ sectors such as manufacturing, buyers are placing value on strong growth and protectable IP.

Countdown to Sale

Here are my top 5 tips if you are considering selling your company:

5. Allow 1 – 2 years for the process.  Finding the right buyer takes time and effort – and increasingly this means searching globally for the right deal.
4. Get your house in order.  A buyer will scrutinise your business is minute detail, so make sure you have conducted your own “due-diligence” or even better, get an experienced accountancy firm to do it for you. It is money well invested.
3. Build a management team.  If you are personally planning to leave after the deal is done, the business needs to run without you. So make sure you have a strong team in place before you start the sales process.
2. Plan to be available.  Once a deal is play, it will consume all of your time.  Not time for that lengthy holiday…
1. Be optimistic but realistic.  The market sets the value of your business. Strong competition can drive value up (and that is partly driven by your choice of business broker), but keep flexible on the value of your business until you have offers on the table.

And above all, keep a sense of humour.  Selling a business is pretty much the most stressful thing you might voluntarily undertake.