Setting companies up for sale is no easy task. Some professional startup entrepreneurs have an eye on “exit” at the start of a venture. They have a business plan that details their growth journey for the years to come topped with revenue- and valuation estimates. They may even have identified potential future acquirers, once they have taken the business to their preferred stage. These people do however not represent the majority of entrepreneurs.
Most people do not even think about the moment they might be inclined to sell their business until some external event arises an opportunity. The sale of your business does however ideally needs to be part of your overall strategy, preferably sooner than later. If your company is generating revenue and profits, you have something of value and it makes little sense to just shut down something that could enable someone else’s success.
When you decide to work towards exiting you need to make sure the business is as capable as possible to run without you partaking. Installing management structures, documenting systems and processes, creating manuals and recruiting personnel is essential for making a successful exit.
Choosing to go down the sales path is by no means an easy decision for any entrepreneur. If you’ve done well, you’re probably an expert at your business and most likely have in-depth knowledge of various processes related to your business. It is however likely that you do not have the same level of experience when it comes to determining the value of your business and presenting your company to potential buyers in the best light, in order get the highest possible valuation for it.
The role of due dilligence when setting companies up for sale
Investors avoid burning their fingers on over-eager acquisitions by conducting proper due diligence, which is an essential process for prospective buyers of businesses. Due diligence basically means to formally verify the information provided by the company that is up for sale.
Setting businesses up for sale and gathering the data required for a due diligence is not easy, even when selling businesses that are healthy and robust. The process requires time to ensure that the organization is in a fit state for sale, requiring the help of accountants, lead sales advisory specialists and IT specialists in order to perform a due diligence of generally acceptable standards.
Our team will go through a process of business optimization, producing a cohesive and documented business strategy combined with the necessary calculations indicating a healthy financial state and potential for growth.