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Posted on Apr 20, 2016 in Financial

How to achieve a successful business sale

Deciding to sell a business unit or a subsidiary will be one of the hardest decisions that you will have to make as a chief executive. Whether you are contemplating about a retirement sale or you have other reasons for wanting to sell, you should know that a disposal can be a demanding process. Your advisers should shoulder the pressure caused by the transactions, so that you can continue running you’re your business. Additionally, the services of BHP Corporate Finance will help you achieve your best value. The key to a successful company sale lies in properly planning your exit. If you are a smart seller, you can make impressive returns.


Analyse your exit options    

Private companies that are considering an exit should be firstly prepared to analyse the full range of options from relevant expectations. This includes financial expectations, risk appetite, tax issues, investors and other stakeholders. The first thing that you need to be aware of is that stakeholders may not always have the time for a transaction, while others may have tax issues if the sale is structured as a taxable transaction. Your business will be worth as much as someone will offer you for it and this is why you are likely to see different figures. You will see that there are broadly three types of buyers: those that want to strip the assets from your company to make a profit, those that are looking towards synergising your business with their own and those looking forward to making a profit running your business as it stands.

Transaction readiness

If you have interest in pursuing the transaction, then you must determine if you are prepared to execute it. Having an outside advisor provide you a preliminary evaluation of the company is useful for managing the expectations of investors. You will have to be prepared to define the current state of the businesses’ readiness to execute a transaction and address availability to support the sale. Readiness means that you will have to be able to respond to key criteria that will drive buyers’ interest. This includes predictability and consistency of the company’s revenue, cash flow, profit, customer base, concentration issues and incentives to keep employees.

Manage the business sale

Management of the sale is necessary, but also important. When you sell your company you cannot slow it down to accommodate the work of selling. A business that is on the market should be operating as good as or better than before it went on the market. The reason why this is important is that the buyer of the business will want to see if what he is acquiring winds down as the sale approaches. So, while the sale may take additional time, the workload should not interfere with the obligation of running a business.

What you are going to do with your time and how your life will look once you are retired is just as important as the financial decision of leaving your business. You should do some analysis in order to figure out how much of the proceeds you should set aside for retirement and with this balance, think about how much you can afford to risk for the next deal.