Key Stages in the Business Sale Process – Stage 2 – Preparation for Sale (Part 1)

An article by Peter Watson, Prism Corporate Broking

Once you have embarked on the sale process, things can start to move pretty quickly and the requirements on your time will get quite intense – especially once an offer has been accepted and you enter the DD phase.  By this point it is largely too late to tidy up loose ends – you do not want to be struggling to find documentation or be doing extensive work to get your figures in order.  By being prepared, you will not only make your life more comfortable but you will also present a much better impression of your business to potential acquirers.

So what is the approach here?  First of all we suggest you try to put yourself in a buyer’s shoes – what are they going to want to look at, and perhaps more importantly how are they likely to interpret what they see?  What they want is confidence that yours is a well-run business.

First impressions – we all know that first impressions count for a lot, so make sure that your website is up to date  and appropriately presents your business (almost invariably the first port of call once your identity is known); and that your premises are clean and tidy.  These things do matter and usually require low cost/low effort tasks to address.

Costs – depending on the timescale you are working to, you may be able to drive out cost prior to sale and improve profitability.  Proceed with caution however – you do not want to over-do this as business performance might ultimately suffer and a buyer will be suspicious of any sudden pre-sale leap in profitability.  Also identify/correct for any non-business expenses that are/have been going through the books (ie. take your helicopter out!).

Separation issues – if the business being sold is a division or part of a group, then you will need to consider how it can be effectively separated and the implications for shared staff and assets.

Some items will need to be addressed well in advance of a sale, so taking stock at an early stage will reap benefits.