Shaping your company to get a better offer when you sell
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Published: 23 Mar 2022
Although you want to show the best possible trading results prior to sale, these are matters of fine tuning as opposed to the real planning points you need to consider.
Plan the sale of your company well ahead
For example, in the SME market there are two typical situations, one or both of which may need to be addressed, if you wish to achieve the best possible price in the quickest possible time.
When it's just you
If you are running your company with no staff or just administrative support, then it is likely that the knowledge of its operations, large or small, rests “between your ears”.
So how can you make that knowledge saleable to a potential buyer?
Apart from relying on his own experience, how will the potential buyer have the confidence to know what to do when you are gone? Well, through computerisation it is much easier these days to record and document your operational and financial systems to make them easily understood and transferable to a new owner. This gives the buyer confidence to accept the sale price on offer.
When there are employees
Secondly, if your company employs staff, you need to consider if they are of the right age and experience to attract a potential buyer.
This means you will need to assess from staff interviews and reviews what are their long-term goals, how their expectations coincide with your plans to sell the company and how the potential redundancy costs in parting with certain employees may be avoided.
So this means planning well ahead, say 2-5 years at least, to ensure at the time of sale that:
- Your systems are properly documented or recorded, and
- You have the right mix of staff.
Successful management of these two situations should enable you to expect a better offer from the buyer.
For advice on company valuations, sale of companies and share interests,(including minority interest disputes), shareholder protection or divorce settlements, call David Cane of Sundial Tax & Finance Ltd on 07749 080 806 or email [email protected]
