Plan the sale of a business well in advance

Building a successful business takes a lot of time, energy & money - so when one decides to sell, ideally it should be planned well in advance to ensure you are rewarded accordingly.


Over the past few years, we have dealt with various business owners who have decided to sell but unfortunately have not planned well in advance of their expected exit - they normally fit one of these profiles :

1) They are owner managed - the owner 'is' the business and once he has left, a substantial portion of the business's value goes with him. With a clear organisational structure and succession planning in place, this can be overcome. Ideally, the incoming buyer wants to know that the business can function without him.
2) Unreliable and outdated financial information - buyers expect up to date information to substantiate the purchase price. If a business operates as a close corporation, it is worth considering audited financial statements for the most recent year end - it adds credibility to the figures
3) Lack of management systems - particularly operating manuals for the key areas of the business. If everyone in the business knows exactly what they have to do (roles & responsibilities), the business becomes far easier to manage
4) Lack of a medium term vision for the business - where is the business going & how is it going to get there ?
5) A hesitancy to provide detailed information on every aspect of the business - there is no substitute for having the right information when making a decision. Buyers expect a professionally prepared disclosure document right upfront so it is worth spending the time in preparing one.

For most business owners, selling a business normally only happens once - creating the right first impression in the mind of a buyer is critical. It starts the process off on the right foot & should reduce the time and effort in concluding a sale.

Would be great to hear from business owners on their thoughts / experiences regarding this critical aspect of owning a business.