Looking to sell your business, then preparation is key
For any business owner, selling the business they’ve worked so
hard to build can be a complex, potentially emotive issue and one
that’s often neglected until it becomes a pressing
Industry estimates suggest that as many as a
third of business closures result from transfer failure often as a
result of poor succession planning. Added to this, a recent
poll claimed that only 25% of Welsh businesses have carried out any
form of planning.
Having supported over 90 Welsh SMEs with
succession investment to date, Finance Wales can offer considerable
insight into the planning and preparation a business owner needs to
do to ensure they get what they want when they finally sell up.
Know your options
There are a number of options to consider when
selling your business. Should you sell to your existing
management team (an internal sale) or to a third-party (an external
sale), for instance?
It’s important to be realistic though when
choosing. A lack of scale or intellectual property could make your
business less attractive to an external buyer, perhaps making an
internal sale a more sensible option.
A clear understanding of your own priorities
will help you to remain in control throughout the process and
ensure you achieve what best suits your needs.
To get the right balance, you’ll need to think
about issues such as:
- Is maximising value
- Do you want to sell your
- Is a lasting legacy important
Finding the right buyer
Finding the right buyer can be tricky, but
having a clear view of your own priorities will help you assess
their suitability. Bear in mind that any potential buyer is
likely to have a different view of the business to your
While your existing management team will have
a better understanding of your company’s culture and are less
likely to restructure, rebrand or relocate the business, external
buyers can offer a more experienced management team and greater
access to finance.
Either way, try to understand and take account
of your potential buyers’ motivations in your planning.
Preparing your company for
Regardless of how you eventually choose to
sell your business, there are a number of things you can do to
ensure you maximise its value and attract the right buyer:
- Understand your business’
strengths and identify and rectify any weaknesses.
- Demonstrate financial
robustness and continue to invest in key assets such as
- Good governance pays
dividends – reliable, timely information will speak volumes about
- Boost your management team
and reduce their reliance on you. The greater your
involvement, the more difficult it will be to sell your
Finance Wales can support a full range of
business succession options. To find out more about how we can help