I've been approached to sell my business - what do I do now?

I've been approached to sell my business - what do I do now?

 

First of all, are you prepared to sell? If you have doubts (beyond value) about committing to the sale now, a reason not to complete is likely to appear! There no halfway house, you are either in or out.

Then, how much do you want? This may well depend on what you want to do after the sale. If you want to travel the world staying in 5* hotels, you'll need a bit more than if you are going to stay home and play golf!

Now you need to assess the value of the business to this acquirer, and to other strategic acquirers. If there’s a gap between your expectations and this value this may be the point at which you abort negotiations.

Identify any “value drivers” and “value drainers” that might significantly affect the value and attractiveness of the business 

Assess the potential acquirer – strategic fit, ability to fund any deal, management commitment

Respond to the acquirer with sufficient but limited information, retaining highly sensitive and confidential matters. Ask the acquirer for a proposal.

Examine the proposal and negotiate the deal or abort.

After that, there’s a couple of rounds of negotiation then due diligence and the legal process. I’ll project manage both to minimise disruption and legal fees!

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Author: Tim Luscombe

Hello, I'm Tim and I'm a specialist in corporate finance for the owner managed business. If you've been approached to sell your business, or you are thinking of buying a business or you just want to know what your business ...