Selling Your Business: Tips From M&A Professionals

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Here’s some useful excerpts from a Smith & Williamson workshop, targeted at owners looking to sell their business. Topics included having a clear vision, a storyboard, and giving the buyer permission to buy.
businessNever tell anyone the value of your business – Stating a value puts a ceiling on the price. The owner can walk in and announce “I’m not taking less that £10M” just as the buyer is poised to offer £30M!
Plan that all your weaknesses will be discovered by due diligence – It can even pay off to be upfront about any problems, to avoid them being used as a bargaining tool later on.
Ignore the averages, focus on what’s special about your business – Because averages are just averages!
Avoid exclusivity as long as possible – Speaks for itself, competition raises the price.
Keep a data room prepared and running all the time – Not just a last minute rush.
Golden Rules for the exit:

  • Control your exit
  • Identify strategic value – do you know what you’re selling? You need a storyboard and a vision
  • Design and manage a sales process
  • Ensure the business keeps delivering (whilst your management teams attention is elsewhere!)

You must own:

  • Route to market
  • Your customer
  • Brand

How to minimise fees:

  • Agree commercials with a solid heads of agreement before engaging lawyers
  • Minimise lawyers and accountants fees by being well prepared
  • Ask the lawyers for a cap fee, and a drop dead fee – if they won’t do it, find another lawyer

These are just some useful tips we noted. If you have any that you think we missed, let us know!
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