Adviser / corporate finance
Selling a Business
transparent. It is likely to come to light during due diligence or when making disclosures under warranties. There is nothing worse than a deal falling over because new information is revealed at the eleventh hour. 8) Lean on your advisers If you think selling a house is tough, selling a business is far tougher! A company is a very complex asset and the seller needs to keep running the business as well as dealing with the sale. The accountants and lawyers are there to help and advise, so don’t be afraid of letting them do it. It is often said that deals always take twice as long and cost double what was originally expected, which would seem to imply that the expectation is wrong. Getting it right is important for both sides, so use the expertise of your advisers. 9) When do you walk away? Unless the grooming for sale has been extremely successful there is often the expectation of a consultancy period after the sale has concluded. The focus is usually on keeping this period as short as possible, but particularly with an earn out there is a vested interest for you as the seller in remaining involved. Make sure there is clarity in what is expected during the period after a sale, in respect of working hours and more importantly your employment status. Often consultancy agreements could be renamed employment contracts and you need to make sure that if your status is challenged you do not lose out. 10) What comes next? It is not uncommon for sellers to say that the period following the sale feels like a bereavement. The selling process is so intense and all consuming that the after- effects are often not considered. Sellers have sunk vast amounts of time, energy and love into their businesses and giving it away, albeit for a nice cheque, inevitably has a psychological impact.
professional advisers. Simple points need to be clearly addressed, for example, are we buying shares or assets? Will there be completion accounts? What is the structure for payment? 6) Knowledge is power Be prepared for what information will be needed by a buyer and make sure you can readily obtain it. It is much harder to be tripped up during a due diligence process if you have anticipated what might be asked. But bear in mind that knowledge is powerful for both sides, so make sure confidentiality agreements are in place with sufficient weight to enforce and ensure data is returned.
“It is not uncommon for sellers to say that the period following the sale of their business feels like a bereavement.”
7) Avoid surprises A sale is a costly business, for time, professional fees and emotional commitment. If there is an issue, be
If you are thinking of selling your business and need some advice, please contact Tim O’Connor or one of his team on 01206 838400 or via our website www.scruttonbland.co.uk. We will work with you on a one-to-one basis to evaluate your objectives and goals in order to tailor our advice around your needs.
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