Selling your business

Selling your business can be a life changing moment and not one to be taken lightly. With the decades of hard graft put into building a business, it is your right to get as much for that business as possible. But how do you ensure you achieve that? Expert in his field, EMC Corporate Finance’s Michael Pay explains the basics

Selling a business can be a complex and daunting task, and it is often a once-in-a-lifetime event for business owners. The decision to sell a business can have significant financial and personal implications, and it is essential to get it right. Despite this, many business owners decide to ‘go it alone’ or use non-specialist advisers to assist them.

In a recent survey we carried out, the reason for this is because often a business owner doesn’t know where to turn to ask for this help, other than their bank, accountant or solicitor. So let us tell you the secret – engage a specialist corporate finance adviser. They will help ensure that you get the best possible outcome from the sale of your business.

The first thing to understand is that the day job of a corporate finance adviser is to advise on buying and selling a business, as well as raising money. They do this all day, EVERYDAY. Ask yourself, who would you rather have carry out complex surgery on a loved one – the man in the street, a general practitioner or an experience, expert consultant?

Value

The primary goal of a corporate finance adviser is to help you maximise the value of your business. They help prepare the sales information, identify potential buyers and know how best to approach, pitch and negotiate with them. They will work with you to understand your business’s strengths and weaknesses, as well as the potential risks and opportunities associated with the sale.

Process

Selling a business is a complex and time-consuming process that involves a range of legal, financial, and operational considerations. Having negotiated the offer, a corporate finance adviser will guide you through the entire sale process, from initial planning to due diligence, negotiations, and closing. They provide expert advice on structuring the deal, knowing the pitfalls that can come back to bite you later if not properly dealt with.

No sale process runs smoothly but having the expert on hand will make sure that you have the best chance of a successful outcome.

Confidentiality

As any business owner can understand, selling a business can be a sensitive matter, and it is essential to maintain confidentiality throughout the process. A corporate finance adviser can help ensure that your business is marketed discreetly. They will qualify buyers and ask them to sign a confidentiality agreement. This can help protect your business’s reputation and prevent the loss of key employees or customers who may become aware of the sale.

Networks

Many corporate finance advisers will claim to have extensive networks of contacts and relationships. Although this does help, the truth is that it is the global research that uncovers potential buyers, including private equity firms, strategic acquirers, is rarely a ‘little black book’. More important is that, with you, they can evaluate and choose the most suitable buyer based on factors such as their financial strength, industry expertise, and cultural fit.

Emotion

Selling a business can be an emotional and stressful process. A corporate finance adviser should help manage these emotional factors by providing a clear and objective perspective on the sale process. They can also help you navigate any potential conflicts with other shareholders, family members, or key employees.

TIME-SAVING

Selling a business can be a timeconsuming process, and it can be challenging to balance the demands of running a business with the requirements of the sale process. A corporate finance adviser can help save time by managing the sale process on your behalf, allowing you to focus on the most important aspect of a sale process – allowing you to do your day job of running your business.

Once agreement has been reached and all the due diligence carried out, the lawyers prepare the legal documents ready for signing. Your corporate finance adviser will make all the necessary arrangements and be there when pen is finally put to paper, ensuring that all the commercial aspects of the deal have been correctly documented and reflected – to ensure that what you see is what you’re going to get.

Of course, all of this takes time –a typical process can last between nine and 12 months – so fees are involved. The benefits of a having corporate finance adviser worth their salt should far outstrip the costs involved. To reduce your exposure to large fees, get a quote in advance and weight them towards a successful outcome, ensuring that they are aligned with you.

Above all, make sure that what you see is what you’re going to get. In other words, check that the senior person ‘selling’ you his or her firm’s credentials to support your transaction is the same person who will be your lead adviser throughout. What you don’t want is the job to be assigned to a more junior adviser once the appointment has been made.

EMC has been doing this for many years and has a strong, proven track record of success across an array of sectors. We are here for advice and guidance should you be thinking of selling your business. After all, it’s all we do.

Restructuring and Insolvency legal expert, and Partner at DMH Stallard, Frank Bouette’s last article focussed on seizing the opportunities economic challenges create. He now looks at minimising supply chain risks to help keep your business stable