We’ve supported a number of our clients in the sale of their business and we’re often asked for advise on this matter.
Two elements come into focus, the first structuring the transaction, the second is positioning the business to the market. Both are equally important and if done correctly can significantly impact the result.
Structuring The Transaction includes:
- Pricing the business.
- Terms and Conditions pertaining to the sale.
- Key aspects of the contract.
- Conducting the sale in the most tax effective manner.
Mostly its ensuring the vendors secure the most effective and efficient outcome for the sale.
Its all about maximising the vendors position.
Positioning the business for sale includes:
- Gaining the maximum price.
- Streamlining the sale to eliminate any hurdles.
- Setting a time limit for the sale.
- Promoting the competitive position of the business.
- Ensuring its operating at its optimum.
- Understanding the best time to sell.
- Targeting who are the buyers more likely to be.
Positioning is simply doing all you can to make the sale a reality. Whereas, structuring is all about gaining the best result from the sale.
The focus needs to be more on the positioning first then the structuring of the transaction. As this is only needed when the sale is undertaken.
With structuring your business you need to be unemotional and objective.
How does the business compare to the market, what’s its competitive position and are their any barriers to a sale that needs to be addressed.
Sell as if you’re the buyer looking at the product, in this case your business.
Buyers will often try to drive down your price, show that your business is in a competitive market. Buyers could be comparing your business to other similar businesses and opportunities, so you need to secure it to have the best position for its sale. This is time you need to spend on preparing the business for sale, prior to offering it up for sale, after all you want the most you can achieve, so make it attractive.
Thinking of selling your business?
Thinking of an exit strategy?
Or perhaps you’d just like to know more, if so then talk to us today.
Heaney Business Group
Tax & Accounting Rockingham | Business & Personal Solutions.
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