Tim Sadka, Partner and Head of our Corporate Team, takes a look at the best ways to groom a business for sale.
As the UK economy delivers modest growth, and it expected to remain on the same path for years to come, it is easy to assume that business owners are not seeing opportunities to realise their investments on good terms with acquisition finance in short supply. The experience of the Rawlison Butler LLP corporate team is that in fact there is ample funding for, and an appetite to support, the acquisition of well managed businesses.
The sale process of a business is for many something only experienced once and, rather like selling a home, it will be a process that either goes well or badly with little in-between. To get the best offer does not guarantee the best price will be achieved. Before a deal completes the buyer will want to verify by due diligence all is well and as has been represented during the pre contract negotiations.
To invite the best offer and to maintain it we recommend clients, in anticipation of a sale process, work with the businesses legal and financial advisors to groom the business for sale. Seven best practices are:
- Develop a credible business plan;
- Employ managers in all key positions;
- Illustrate that the seller(s) is/are not needed day to day in the business;
- Maintain accessible business records;
- Use systems that can report quickly and reliably;
- Understand your management information; and
- Engage professional advisors who have a track record of success.
This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.
First published on 26 April 2012 in 'Business Matters' within the West Sussex County Times