Deciding how and when to leave your business ranks among the biggest calls you’ll ever make as an owner. Maybe you want a clean break. Maybe you’d rather step back gradually and stay involved. Either way, a successful sale rarely happens by accident. It takes time, planning and a clear sense of who you’re selling to.
Here’s how to prepare your business for sale and give yourself the best chance of finding a buyer who’s the right fit.
Start with a date and work backwards
Exit planning shouldn’t be a last-minute job. Ideally, you’ll start thinking about it years before you want to sell.
Begin by picking a target date. Then ask yourself what your exit looks like. Are you walking away completely, or do you want a continuing role? Once you know where you’re heading, you and your advisers can work backwards to plan when to start preparing the business, when to go to market and when to begin talking to buyers.
Know who might buy your business
Buyers come in a few broad types, and the best match depends on your sector, the nature of your business and how it’s grown so far.
Family members. Handing the business to the next generation keeps it close to home, but it raises its own tax questions and needs careful succession planning.
Trade buyers and investors. Competitors, suppliers and complementary businesses often buy to grow, while private equity and other investors look for strong growth potential.
Individuals and management teams. Your own employees may want to take the reins through a management buyout. Outside individuals are sometimes keen to run an established business instead of starting from nothing.
Each route needs different groundwork, from tax planning and governance to the story you tell about your business. Bevan Buckland uses an Exit Route Map to help owners weigh up these options and see which path best suits their goals and is most likely to deliver value.
Expect it to take longer than you think
Once you start marketing your business, a straightforward sale can take six to 12 months. That doesn’t include the years of preparation that make a business attractive in the first place.
How long it takes depends on the type of buyer you’re targeting, how organised your financial and operational records are and how busy the wider mergers and acquisitions market is at the time. A clear timeline, from initial planning right through to post-completion, helps you see what’s coming at each stage.
Rushing almost never pays off. Giving yourself time to prepare properly and run a well-managed, competitive process usually leads to a better valuation and better terms.
How to find the right buyer
You can’t just put a “for sale” sign up and wait for offers. Finding the right buyer takes a deliberate approach.
Start by understanding your market. Individuals, trade buyers, private equity firms and family offices all want different things, so your pitch needs to speak to their priorities.
Next, run a structured process. Identify several potential buyers, present a clear and compelling picture of your business and protect confidentiality throughout.
And build the right team around you. Experienced M&A advisers and corporate lawyers know how to market a business selectively and keep the deal on track. Bevan Buckland is a member of The Corporate Finance Network, which gives its clients access to specialist databases and contacts for identifying potential acquirers.
“Someone’s already approached me. Why go to market?”
An unexpected offer is flattering. But don’t let it hurry you into a decision. Testing the market protects you in several ways:
- A fairer price. With only one buyer at the table, they set the terms. Competition helps you achieve true market value.
- Stronger negotiating power. More than one interested party can improve both the price and the deal structure.
- Less risk. If a sole buyer pulls out late in the day, you’ll have lost time and momentum.
- A better fit. The first buyer to call might not be the right long-term home for your business, your team or your clients.
Going to market doesn’t mean speaking to dozens of people. It means running a controlled process that gives you real choices, so you can be confident you’ve picked the best option.
Plan early, sell well
Selling your business could be the biggest moment of your working life. With early planning, good advice and enough time, you won’t just find a buyer. You’ll find the right one, on terms that reflect everything you’ve built.
If you’re starting to think about your exit, the corporate finance team at Bevan Buckland can help you map out your options, prepare your business and run a sale process that protects its value.
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