Deciding to sell a business is often the most difficult decision a business owner faces, and involves many complex choices, such as when the owner or owners want to sell, who is a likely buyer for the business, what will happen to the employees in the event of a sale, what is a fair value for the company that an owner may well have spent a lifetime to build, and what steps should the owner take.to prepare for the sale and maximize the value. We encourage our clients to plan the “exit strategy” years ahead of time, if possible. If there’s one or more natural successors to the business in existing management, grooming those “heirs”, and creating a succession plan early on can provide peace of mind and maximize value to the owners, as well as provide significant incentives to the management team to stay on and grow the business.
If the likely buyer is an outsider – possibly a strategic acquirer, a competitor, or venture firm; preparing the company for that sale takes significant time. We work with the owners, and accounting representatives, to identify and implement steps that will increase the attractiveness of the company to a potential buyer when the time is right. In a competitive economy, with an aging baby boomer population, and record numbers of businesses “ripe” for sale, the most efficient operations with the best legal and financial records will be those that survive “due diligence” investigation and bring the best price.
If the sale will be pursued as an M&A transaction with an investment banking concern, identifying the right investment banker for the particular business takes time, and negotiating the confidentiality and fee agreement is paramount, because the investment banker, and the business accountant and attorney, together with the Company’s management team, working in tandem leads to the greatest likelihood of a successful transaction.