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Before a sale

The sale of your business is something you can do only once. When you initiate the sales process and the first potential investors have been contacted, the process goes into overdrive. A sales process requires a significant investment from you, both in time and money. A failed sale results in loss of this investment and limits you to sell again in the coming years as potential investors are scared off or no longer interested.  To ensure a smooth, fast and efficient sales process there are certain things to consider beforehand.

Set the objective and select the best funding option
Depending on your objectives a sale of (a portion) of your business might not be the best option. Set your objectives clearly and determine what is best way to realize that objective. If your objective is to obtain obtain funding for working capital financing or financing to purchase new equipment obtaining a loan through a bank or crowdfunding is better. Understand all available financing options before starting a sales process.

The best timing and how to prepare your business
Once you decided to sell your business the next step is to determine the best timing to sell your business. This is dependent both on external factors (e.g., how is the overall economy doing) and internal factors (e.g., is your business showing consistent growing revenues and profitability). Next to timing, there are several things you need to arrange to prepare your business for a sale and to be sure you will get the highest sales value possible.

Which advisors do you need
There are a large number of external advisors active in a M&A deal. This number can vary from 1 to more than 10. Whether or not you need an external advisor depends on several factors (e.g., size of your business, estimated sales price, complexity of the deal and your experience with prior transactions). Understand the role of each advisor, how they work, if you need an advisor and if yes, know how to find the right advisor.