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Did You Know Planning A Business Exit Takes 7 Years? Where Are You At?

by charlottenoble
Did You Know Planning A Business Exit Takes 7 Years? Where Are You At?

Succession planning and/or exit planning is a very common topic we encounter as CFO’s when addressing a client’s top list of priorities.

In fact, a current client of mine has listed this as their number one priority to be achieved over the next two years. “I want out in two years, and I want $xxxx!”

Business owners spend years building their businesses, nurturing, and developing them. For the most part, the very reason they started the business was inspired by a passion or an idea. Usually around a certain product or service that they felt could not only be a commercial success, but one that would make a difference.

Common Scenarios

A common scenario we encounter as CFOs at the CFO Centre is a client up to their neck in meeting the day-to-day challenges of keeping the business “running smoothly” but just don’t have the time or wherewithal to put in place the mechanisms or strategies to set the business up for succession or exit.

In fact, we find the opposite. Business owners becoming so entwined in the business that they are involved in every aspect requiring their input. This makes the business impossible to feel separate as a stand alone entity, also making it even less attractive for a prospective purchaser.

Many business owners want that elusive buyer to walk through the door and offer a nice big settlement. The owner can then sail off into the sunset with a suitcase full of retirement cash.

This is not planning this is mostly wishful thinking. However, all is not lost and this is where we at the CFO Centre can help.

As I mentioned I currently have a client that wants to sell all or some of his business that he has built over the past twenty years. It is in manufacturing and in an industry that has its own set of unique challenges in terms of risk profile. So what can we do to assist?

Just like a real estate agent advising a client the things to put in place when selling a house, we can apply independence, objectivity, and non-emotional advice on how to position a business for sale.

Like anything that is worthwhile, setting up and executing the sale of a business or putting in place a successor takes time. Furthermore, this can take years to achieve. It is not a quick fix. Like a health check we need to implement the fundamentals that make a business successful and independent. Using our matrix of twelve financial building blocks we build the platform which enables you to ‘own’ rather than ‘run’ your business.

A more in-depth discussion can be had around our 12-box program but in essence they are:

The 12 boxes

Ideally, we address all operational issues 1st and foremost at the outset of our engagement in conjunction with our 4 boxes of business support. Implementing the 4 fundamental operational boxes sets up a healthy platform for the business making the business all that more appealing to a prospective buyer.

Once these are in place, we then transition into more of a strategic role. We can be that mind and voice of objectivity and independence. This is especially helpful in family companies whereby that non-biased voice of reason is so critical when making strategic decisions.

Here at the CFO Centre, we have an extensive network of affiliated partners. This includes business brokers, tax accountants, legal practitioners etc. This assists in providing great support under the business support matrix (above), together with our extensive network of CFO’s and their clients. Such a large business database is helpful when trying to attract interested parties for an owner motivated to sell. Never underestimate the power of our network.

There are other ways for an owner to exit other than a sale.

The most obvious being succession planning. Someone, or a group of employees within the organisation  take over from you as the owner/operator. This does require years of training. Ideally one recruits or selects someone within the organisation that shows good leadership and management skills. Normally, this person will come with an entrenched set of skills – either sales/marketing, finance or operational. Whatever that skill base may be, one then needs to embark on a program of broadening these skills. They should encompass a good grounding in all key commercial disciplines – sales/marketing, finance and operations.

It is then critical to tie this person’s remuneration to the performance goals of the business. So when these are met, the individual concerned is rewarded – ideally through equity participation in the business. When I joined Australis Music back in 1996 as Finance Manager this was my exact path. Ultimately, I took over the CEO’s role from the Owner/Founder, Peter Hayward, in 2003. So, seven years of grooming and slowly handing the reigns. When Peter sadly passed away unexpectedly in 2006, he had done all things necessary to ensure that the company was in safe hands and that his largest asset was protected. I continued to oversee the company as CEO for three years after his passing, and ultimately sold the business to private equity.

The Moral?

The moral of this story – 7 years. 7 years it took to develop and execute the succession plan. By applying our 12 financial building boxes we can play a key role as your part time CFO. Assisting in the execution of your succession/exit plan. The key however this is a process and not a quick fix that can take years to implement.

 

7 Ways To Increase Profit And Business Value

by charlottenoble
7 Ways To Increase Profit And Business Value

Have you ever wondered how your business is valued in the eyes of an external party? Then you need to know the seven (7) levers in your business.

With just a little additional focus on one or more of these 7 levers, you can directly improve the cash-flow, profitability and/or value of your business. There’s no smoke and mirrors, nor anything particularly difficult to undertake. However, many business owners do not take the time to appreciate how the financial performance of their business really works.  So, let’s break it down.

Often business owners will primarily focus on sales volume, in other words trying to sell more. However, whilst sales volume is important, it’s only one of the 7 levers available to you.

What are the 7 levers in a business that control your cash, profit and business valuation?

The first four levers are focused on your Profit and Loss and therefore directly impact the profitability (and cash-flow) of your business. As most, businesses are valued at a multiple of cash earnings. These levers also have a huge impact on the value of your business (along with other aspects such as Brand, customer base / income streams, and internal expertise / “keyman” dependence).

  1. Volume

Selling more – although increasing sales can grow your business, don’t forget to focus on the other levers below! How much of every extra $1 in revenue turns into profit and into cash in your bank account, and when?

Tip – formulate a sales & marketing plan, with a budget, which is aligned back to your  overall Strategy. Review and tweak the plan regularly.  This will help keep you focused on the right way to grow your top line.  Any growth needs to be sustainable!

  1. Pricing

can you increase your prices? Even a 1% increase can have a big impact. There can be a fear of losing customers by putting up your prices, which can often be unfounded.

Tip – review your margins by product / service stream / customer to ascertain which sales are making you money and which are not.  You need to know your break-even points!  Your part- time CFO can help – they love this stuff!

Tip – the results of your pricing analysis need to dovetail into the sales & marketing plan. It’s possible to make more profit from less turn-over!

  1. Cost of Goods Sold – reduction in % terms

This lever is most relevant to those businesses with direct costs such as manufacturers, construction, etc and places the focus on your gross margin.

Tip – revisit your direct purchasing arrangements and negotiate better terms and pricing. For example, bulk purchase discounts, early payment discounts, reduced freight.  Maintaining strong supply chain relationships is important but that doesn’t mean you can’t ask the question (or find potential alternatives).

Tip – review your direct labour-force using metrics such as labour utilisation, overtime levels, re-work, customer complaints, and down-time.  You may be able to re-deploy staff or reduce casual labour / overtime once you have this data.  Again, your part-time CFO can make this happen for you.

  1. Reducing Overheads

This may sound like an obvious one, but we always find at least some unnecessary “fat” in our client’s overhead expenditure.

Tip – someone needs to review the overheads line by line. Indirect / office wages, communications, insurance, utilities, freight, and advertising are the common ones where savings can be achieved. Even small reductions in certain areas can all add up over time!

These last three levers are focused on your Balance Sheet and are collectively called Working Capital. They have a significant impact on your cash-flow and therefore also on your funding requirements. Many businesses can avoid additional debt borrowings, or pay their existing debt faster by shortening their cash-conversion cycle.

  1. Reducing debtor days

This means improving the ageing profile of your Accounts Receivable function (i.e. getting your customers to pay you faster).

Tip – review your credit control policy and your payment terms as customers with poor payment histories should be carefully managed.  Review your collections process in terms of who chases the debt and when.  The introduction of direct debit may be an excellent solution for some businesses.

  1. Reducing stock days

This means a faster conversion of your inventory (if you carry it) into sold product, thereby reducing the amount of stock you hold.

Tip – introduce a stock-take process if you don’t have one. This can ensure that your financial records mirror what you actually have on the shop-floor. Then review the results of the stock-take for slow-moving or obsolete stock items – these may need to be discounted in order to convert them into cash.  Your purchasing policies may also need review if you are over-stocked with certain inventory lines.

  1. Increasing creditor days

This means taking longer to pay suppliers (without hurting the relationship or cutting off supply).

Tip – contact your suppliers to re-negotiate your settlement terms. It’s just a matter of asking the question – they may say “no” but then again, they may really value your business.

Now you know the what the 7 levers are, it’s time to do something tangible with them in order to make a real impact on your business. If you don’t have the internal expertise or time to make it happen, we would be happy to talk to you about how a part-time CFO can bring this to life. After all, as CFOs it’s what we do!

 

Photo by Monstera

Do These 6 Things Before You Plan For The Year Ahead

by charlottenoble
Do These 6 Things Before You Plan For The Year Ahead

Now is the perfect time to reflect on the year just gone and plan for the year ahead.  The last two years have thrown many of us challenges and/or opportunities never seen before.  So how can your business go further or do better in 2022?

Below is a checklist for businesses to help you when planning for the future:

  1. Know Where you Stand

Does your financial reporting provide you with an accurate and timely view of the financial performance of your business? These could contain:

  • Historic balance sheet, profit and loss and cash-flow together with a set of key performance indicators (KPIs) that the management team use to run the business on a day to day basis.
  • Rolling forecast balance sheet, profit and loss and cash-flow driven by the same KPIs. Even a static annual budget is better than no target at all.

  1. Analyse

Have you analysed all of your products or service offerings and identified those that should be invested in and those which should be scaled back to improve the performance of the business?

  1. Review Costs

Have you reviewed all of your costs and identified all of those costs where alternative suppliers can be identified and current deals can be renegotiated? This helps to minimise your cost base and refine your negotiation skills.  Are there possible savings from systems and/or process streamlining?

  1. Review Customers

Have you reviewed all your customers and identified the good ones form the bad ones i.e. those that take ages to pay and/or beat you down on price etc.? It may be time to let the bad ones go and focus on the ones you want.

  1. Assess Risk

Have you assessed all of the obvious risks in your business and made sure that you have a contingency plan in place to avoid those with the highest likelihood and most significant impact?

  1. Your Personal Goals

Take the time to really reflect on why you started the business, are those goals still the same today and are you getting closer to achieving them?

Plan:

Once you have considered the above, you are ready to start planning.  A clear operational plan for the future of the business, which shows you the steps required to implement that plan is the best road to success.  If you do not have this it will be impossible to identify opportunities that arise next year that fit your plan for the business.

Most of our clients have been through this process with our guidance and as a result many are now looking to exploit the opportunities, to expand their markets and recruit key staff to help drive their businesses forward in 2022.

To get your business in the best shape for 2022, contact the CFO Centre on 1- 800 – 918 – 1906.

The CFO Centre is dedicated to helping businesses meet their strategic objectives. Find out how it works by watching this short video on our website –  https://www.cfocentre.com/en-ca/how-it-works/

 

What Is The Most Important Number In The Universe?

by charlottenoble
What Is The Most Important Number In The Universe?

Numbers matter.

Our mathematical universe is constructed of numbers.

Some we can see. Most we can’t.

From the speed of light to the parabolic curve of a free-kick in soccer, maths underpins the laws of the universe.

We can also deconstruct our entire lives in numbers.

The average human lives for around 80 years – or 28,385 days.

Most of us will spend 33 years in bed. That’s 12,045 days. For those who hit snooze when the alarm goes off in the morning, it might be closer to 34 years…

You’ll likely spend around 13 years and 2 months (4,821 days) at work. Hopefully, doing something you love.

And 11 years and 4 months (4,731 days) staring at a screen.

That doesn’t leave a huge amount of time for the things that really matter in life…

Spending quality time with family is remarkably, although perhaps unsurprisingly, a very small part of our modern day lives. We’re down to just 38 minutes a week or 104 days in our life time.

That one makes you think.

When it comes to socialising, there’s a little improvement – we’re up to 1 year and 3 days. Again, it’s not a lot, is it?

In business, it seems like we focus constantly on the numbers…
…Leads, opportunities, wins.

Year on year growth.

Cash flow, profit, valuation.

But how often do we put these numbers into context?

How often do we ask ourselves ‘what is the number that really matters to me?’

When we ask entrepreneurs this question, they often find it hard to answer.

It’s an unusual question and causes an interruption in our conditioned daily thought pattern.

One entrepreneur said the number that really mattered to them was ‘6’ as it represented the number of weeks they spent each year skiing, because they had designed their business to support their lifestyle.

Another said ‘13’ to denote the $13m asking price for their business which meant they could retire early and never worry about money again.
The numbers that appear on your P&L and balance sheet matter, but when was the last time you stopped and asked yourself ‘what is the number that really matters to me?’

It’s a powerful question and invariably creates an energetic shift which can fuel a new trajectory for your business and indeed your life.

If you’re struggling to answer that question, we’d love to help: www.cfocentre.com 

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Don’t Call it Your Dream, Call it Your Plan

by bethfarnham
Don’t Call it Your Dream, Call it Your Plan

Life through a lens

One of the toughest challenges for owners of SMEs is to be able to stand back, to look at their business through a wide-angle lens and identify what it is they really have.

Because quite often, the day-to-day distractions and diversions that inevitably surround the running of a successful business – particularly when there’s a global pandemic pulling the rug from under everyone’s feet – get in the way of sensible, objective evaluation and strategic decision-making. Crucially, that can mean that really important opportunities to grow and develop go at best un-exploited and at worst, un-noticed.

This is where the role of Chief Financial Officer becomes so vital. And where the specific advantages of joining forces with a part time (and often virtual) CFO are brought sharply into focus.

Allow yourself to dream…

What does your CFO do for you as the owner of an SME? Hopefully, they’ll make sure that everyone gets paid the right amount at the right time; sort out your internal reporting, compliance and tax planning, and probably run your relationship with your bank.

While that (along with a few other bits and pieces) is probably enough to keep a business ticking over, it’s not a reasonable platform on which to base a sound growth strategy.

Of course, things look even worse if you don’t have a CFO on your team. Whatever your business and whatever your own specific talent, it’s almost certain that you didn’t get into business to spend your life doing cashflow projections or dealing with taxes! No dreaming for you – you’re more likely to be waking up at 3 am in cold sweats.

A CFO Centre CFO can help make your dreams come true

When you started your company, you almost certainly allowed yourself to dream – every successful business operator needs ambition. But as we’ve seen, all too often those aspirations become bogged down in the everyday grind of keeping a business afloat.

The CFO Centre team provides CFO expertise of a very high caliber – the top 1% of talent in the marketplace. These are people who know their stuff – the operational finance stuff, which keeps the wheels in motion and the strategic finance stuff, which brings the dream to life.

In many cases they’re able to draw on their own business success to guide others.

A CFO Centre CFO will help decode the dream and turn it into a plan and be the one to hold you to account to make it happen. He or she will bring forward the target by showing you how to come at it from a different angle. Great CFOs are catalysts and can help you break the pattern of linear growth and get you what you really want on an expedited timetable. And that’s essential if the dream is still to come true.

The CFO Centre ‘Entrepreneur Journey’: our ‘secret sauce’

All CFO Centre CFOs operate within an environment that provides comprehensive support and expertise. The CFO Centre has a global network – a Collective Intelligence Engine – of more than 700 individuals, each of whom has achieved success as a CFO and often as an MD or CEO, themselves. What’s more, they are uniquely able to access and deploy the limitless potential locked up in your business model. And they talk to each other, share expertise, experiences, and contacts.

In brief, a CFO Centre CFO will guide the entrepreneur on a three-stage journey to achieve clarity about what it is they really want from their business. To take them from where they are now, to where they want to be.

And to be clear: ‘where they want to be’ is an individual choice for the business owner. It might involve scaling up significantly; it could mean launching new products in new markets around the world; perhaps it means ratcheting up your multiple as you prepare for exit. Whatever form it takes, it’s invariably about making that dream a reality by refashioning the plan and making sure it actually happens.

Stage One on the journey covers the process of achieving operational excellence. In other words enabling an organisation to do what it does best, to the best extent possible.

Stage Two, strategic opportunity, involves preparing the springboard. This is where the strategy to achieve those dreams is forged. Perhaps it’s a question of entering new markets; evaluating risk, raising new funds. Whatever the strategy, it’s based on sound experience and, yes, that ‘secret sauce’ that blends the logic with a little magic and know how.

Stage Three, game-changing performance is, simply, what happens when stages one and two are complete.

The dream is achieved by developing a concise roadmap based on what the business owner wants to achieve. The role of the CFO Centre CFO  is to identify and unlock that potential – thus freeing the dream and making it a reality.

Fly like a bird

Of course, this is not to suggest that success comes easily. Business challenges are usually complicated and risky. That’s another reason why potential isn’t always realised; why many business owners end up working late nights on mundane tasks.

So, one of the first conversations a CFO Centre CFO will have with a client is to understand what it is that motivates them to be in business, and what they want to achieve from it. What really matters to them. There are numbers, many numbers, in the life of a CFO, but it’s identifying and understanding the numbers that really matter in the client’s life that is crucial.

A CFO Centre CFO aims to unlock that potential and give wings to the dream.

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How to Scale Your Business for Growth

by charlottenoble
How to Scale Your Business for Growth

How to scale your business often depends on two factors: your company’s capability and its capacity to deal with growth.

To scale up your business, your company must be capable of dealing with a growing amount of work or sales and of doing it cost-effectively.

You need to know that your company can achieve exponential growth without costs rising as a result. It’s vital too, that performance doesn’t suffer as your company scales up.

You also need to be sure that your business systems, employees, and infrastructure can accommodate growth. For instance, if you get a sudden surge in orders, will your company be able to cope? Will you be still able to manufacture and deliver products or services on time? Do you have enough employees to deal with a surge in work or sales?

Scaling a business requires careful planning and some funding. To be successful, you’ll need to have the right systems, processes, technology, staff, finance, and even partners in place. Keep reading to learn how to scale your business below:

Identify process gaps

Audit your business processes (core processes, support processes, and management processes) to find their strengths and weaknesses. Find the process gaps and address them before you start to scale up.

Keep the processes simple and straightforward. When learning how to scale your business remember that complex processes slow things down and hinder progress.

Boost sales

Decide what your company needs to do to increase sales. How many new customers will you need to meet your scaled-up goals?

Create a sales growth forecast that details the number of new clients you need, the orders, and the revenue you want to generate.

Examine your existing sales structure and decide if it can generate more sales. Can you increase your flow of leads? Do you need to offer different products or services? Is there an untapped market? Do you have a marketing system to track and manage leads? Is your sales team capable of following up and closing more leads?

Make sure you have enough staff to cope with an increase in sales. If you don’t have enough staff, consider hiring new employees, outsourcing tasks, or finding partners that may be able to handle functions more efficiently than your company.

How to scale your business means learning how to first Forecast costs

Once you’ve done the sales growth forecast, create an expense forecast that includes the new technology, employees, infrastructure and systems you’ll need to be able to handle the new sales orders. The more detailed your cost estimates, the more realistic your plan will be.

Get funding – knowing how to scale your business means knowing where it needs to scale also:

If you need to hire more staff, install new technology, add facilities or equipment, and create new reporting systems, you’ll need funds. Consider how you will fund the company’s growth.

Make delighting customers a priority

To reach your sales forecasts, your company will need loyal customers. You’ll win their loyalty by delivering outstanding products or services and customer service every time you interact with them.

How to scale your business by investing in technology

Invest in technology that will automate tasks. Automation will bring costs down and make production more efficient.

Ensure that your systems are integrated and work smoothly together.

Ask for help about How to scale your business:

Don’t be afraid to ask for help from experts who have experience in scaling up companies. In an interview, Apple’s co-founder, Steve Jobs, said, “I’ve never found anybody who didn’t want to help me when I’ve asked them for help.

“I’ve never found anyone who’s said no or hung up the phone when I called – I just asked.

“Most people never pick up the phone and call; most people never ask. And that’s what separates, sometimes, the people that do things from the people that just dream about them. You gotta act. And you’ve gotta be willing to fail; you gotta be ready to crash and burn, with people on the phone, with starting a company, with whatever. If you’re afraid of failing, you won’t get very far.”

 

If you have enjoyed this brief article you may also enjoy learning about our 12 box approach!

Need Help with Your Cash Flow?

by charlottenoble
Need Help with Your Cash Flow?

Cash flow problems put your company at risk.

Unless your company manages cash flow effectively and uses regular cash flow forecasts, your company is in jeopardy. Cash flow shortfalls mean:

  • You can’t pay suppliers on time
  • You can’t make debt repayments on time or at all
  • You can’t buy new inventory to meet customer demand
  • You can’t pay staff wages
  • You can’t compete for new contracts
  • You can’t advertise to attract new clients
  • You can’t hire new staff.

This will have a knock-on effect on your company’s profits, market share, and brand reputation. It could even result in your company going into liquidation.

One US bank study found that 82% of business failures are due to poor cash management.

How to Fix Your Cash Flow Shortfalls

Fortunately, most cash flow problems can be resolved with help from the right people. They will help you to identify the causes of cash flow problems in your business and advise the best way to fix them.

To find out how to fix your cash flow problems and prevent them from recurring, grab your free copy of the “Cash Flow” report NOW!

Causes of Cash Flow Problems

Conditions that can impact your cash flow include:

  • A fall in sales or a decline in gross profit margins. This could be a result of changing economic conditions (such as the most recent global financial crisis), increased competition, or a drop in demand for your product or service.
  • An unprofitable business model
  • Using a negative cash flow business model. You offer customers or clients credit terms of anywhere from 30 days to 90 days (or longer).
  • Having excessive debt
  • Having inadequate stock or credit and debtor management.

Your cash flow problems can be due to any of the following:

Late paying customers When a customer doesn’t pay on time, your business can experience cash shortfalls.

Poor debt collection processes Not issuing or chasing up invoices in a timely fashion can result in reduced cash flow.

Low prices If your prices are too low, but your expenses are rising, your company is almost certain to experience cash flow problems.

Low sales Too often business owners try to resolve poor sales by looking for new clients. But this incurs more costs in areas like advertising and marketing to attract those new clients.

Too generous payment terms Allowing customers to pay in arrears for goods or services received is a bit like giving those companies short-term, interest-free unsecured loans.

Overtrading Rapid growth means your company will have to invest in more stock, equipment, or hiring staff to meet demand. If you don’t have sufficient working capital, the company will experience cash flow problems.

Too much stock Every dollar or pound you have in inventory is a dollar or pound you don’t have in cash.

Too much debt If you’re overleveraged (when you’ve borrowed too much and can’t pay interest payments or principal repayments or meet operating expenses), you’re likely to experience cash flow problems.

Cash Management

Cash is vital to your business. Without it, your business won’t be able to pay suppliers and creditors and to meet its payroll obligations.

Finding and fixing the cause of your cash flow problems in your business and putting systems in place to manage cash effectively is vital for your company’s survival.

Checklist: How to Sell Your Business Fast

by charlottenoble
Checklist: How to Sell Your Business Fast

Plan Your Perfect Exit Strategy

Selling your business to the right buyer for the right price at the right time depends on the health of your business, having the right advisors, and your timing.

Get these factors right, and you can sell your business quickly.

Before putting your business up for sale, you’ll need to clarify:

  • Why you want to sell the company and what you hope to achieve.
  • Your ideal buyers and what their plans for the business would be.
  • Your goals for the sale. Do you want an earn-out clause or a cash sale?
  • How you’ll improve the current value of your business to get the best price.
  • How to market your business to sellers. You need to decide whether to use business brokers to do this or do it yourself.
  • The timing of the sale. You need to sell before patents, licenses, leases, etc. expire.
  • Due diligence. You’ll need accountants, legal advisors, along with specialists in tax, sales, and IT to perform vendor due diligence and make that information available in a virtual or real data room for potential buyers.
  • Who will negotiate the deal?

The following checklist will help you to achieve the best deal for your company.

Your Exit Plan Checklist

  • Clarify why you want to sell your business

You need to decide why you want to sell the business. It’s something prospective buyers will ask you, and it will have an impact on the business sale.

For instance, do you want to retire because you’re fed up with the stress of running a business or suffering from ill-health? Or is it because you want to start a new business, or allow someone with more expertise to take it to the next level?

Your reasons for selling the business could have an impact on the timing and outcome of the sale. For instance, if you decide you must find a buyer as soon as possible, you might have to accept a lower price or less attractive deal.

  • Decide what you’re selling

You need to decide if you’ll going to sell some or all of your company’s assets or the legal entity of your business as a share sale.

  • Focus on areas of improvement

Identify the issues and areas of improvement in your business and develop a plan for dealing with them.

For example, how can your company become less reliant on one or two major customers or suppliers? Are there areas that will benefit from cost-cutting? Is there a potential for rapid growth in the business? Can you improve productivity?

  • Prepare your accounts

You need to show how well the company has performed in the past few years.

Prospective buyers will expect to see at least three years of trading accounts. Buyers will be put off if they discover reports are missing or inaccurate. It will make them doubt your claims about the company’s health.

  • Get your paperwork in order

Your paperwork needs to be up to date and available to prospective buyers.

They’ll want to see supplier/buyer arrangements, licenses, maintenance agreements, lease or hire purchase agreements, business rates, insurance policies, list of employees, and their contracts, along with your company incorporation documents.

  • Resolve disputes

If you have problems with suppliers, customers, other companies, or employees, you need to document them and, if possible, resolve them before you put the business on the market.

  • Decide who will sell your business

Business brokers (or business transfer agents) can market your business for you, or you could do it on your own.

Brokers will demand a percentage of the sale if they sell on your behalf.

You also need to clarify what brokers will do to sell your business and whether you will be involved in picking and interviewing candidates.

Check for details such as extra fees or costs, termination rights, and cooling-off periods.

Look for business brokers that have experience in selling companies in your industry, in your markets, and similar size businesses.

  • Get a business valuation

Prospective buyers will want to know the true worth of your company. Hire a business valuation expert to do this for you.

  • Get expert advice

Put together a team of trusted legal and financial advisors who have expertise in selling companies. Get their help to identify areas of the business that need attention and on how best to proceed with a sale.

  • Create a confidentiality agreement

You won’t want sensitive details about your company or its sale leaked to employees, competitors, suppliers, creditors, and customers, so make sure prospective buyers sign a confidentiality agreement.

  • Perform Due Diligence

You need a team of specialists to produce a documented business strategy, healthy financials, along with information about your employees, and plant and IT systems.

That information must be made available in a real or virtual data room for prospective buyers to view and check.