Business Sales (Plan it; Build it; Bank it)

Selling your business

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We have our own three stage process for helping you get the best outcome from your business sale; Plan it; Build it; Bank it.

It would be wonderful to be able to advise owner managers that their business can be sold for a sum which will meet all of their and their families’ expectations over a period of say 3 months with minimal input.

Sadly this is rarely the case.

 

We draw an analogy with the sale of a family home. You can put it on the market now with dents in the skirting boards, needing redecoration and with a few drainage and guttering problems causing a green stain on the wall and damp in the kitchen, and to cap it all a boundary dispute with the neighbours. You will have seen from the programmes on television that a house in this state is probably unsaleable and, if it can be sold, then the price will be seriously discounted.

Of course these things can be sorted out, and often at very little cost. If you don’t deal with them then the buyer will, and he will get the upside, not you.

The Process

Plan it

In the Plan it stage we aim to identify the strengths and the weaknesses in your business to help you build on the strengths and rectify the weaknesses. We will also help you see your business through the eyes of your target market and point out to you what your business will ideally need to look like to be attractive to a buyer. Keep in mind that the acquisition of a business is a big commitment in time and money both for you and the purchaser and it’s not something that purchasers enter into lightly.

The sort of things we will be focussing on include your ideas about the future, how much involvement you want in the business going forwards, your time scale for the sale, the management structure (ie is there a management in place that can run the business without your full time involvement), the strategy for the business pending sale, looking at investments and other initiatives from the perspective of whether they could improve your shareholder value in the short term, and the plan for keeping key staff onside without compromising confidentiality.

We will also offer you advice on the financials such as profitability, cash flow, your balance sheet structure, your terms of trade including contract terms with customers, and your banking and other finance arrangements.

Build it

Once we have a plan, then we can work with you to implement it over whatever period is appropriate. We normally agree to keep a watching brief in this part of the process and we can introduce other consultants to assist with the implementation of the non-financial aspects of the plan. This is the Build it phase.

Bank it

Once you have taken the decision to put the company on the market we will agree with you the best marketing approach. That discussion will include the level of confidentiality you wish to maintain, which in turn will dictate the way in which potentially interested parties are approached (incidentally, as a matter of course we never distribute sales memoranda without your prior approval or a Non Disclosure Agreement).

We would normally advocate a happy medium, focussing on interested parties that you are aware of and those that come out of our research. We find that this gives us and you a degree of control over who has access to information about your business while enabling us to open negotiations with the parties who are most likely to offer for your business.

Our skill really tells in the course of negotiations. We know that our job is to understand the commercial implications of the negotiations, discuss those with you and advise on how to proceed, bearing in mind that there is always a balance between achieving the optimal value and the need to move the deal on within a reasonable timescale.

We aim, if we can, to suggest alternative approaches which will give both parties (some of) what they want from the deal, while maintaining momentum.

One of our greatest skills, though, is to understand your business and what that means for the price being paid. For example, in a recent deal we were aware that the company was going through a purple patch of profitability while negotiations were continuing. We managed to negotiate an adjustment to the price that reflected the net asset position on completion that has given the shareholders over £1 million more than they were expecting.

We work in a virtual team with the lawyers. We help direct and have commercial input into any legal issues. Often legal points have a commercial solution. It is our job to help find that for you. We always aim to be direct and to understand the options in working around problems and find the most cost effective way through them.

But our main role in the Bank it stage of the process is to drive the whole process and give you have as much time and mental space as you need to run the business while all this is going on.

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Testimonial

"Rosemary was very professional and made the transaction as smooth as it could possibly be including bringing in the legal team,” he added. “We were dealing with an American company so FPN made the liaison process smoother with an intuitive understanding of the American market and late night calls to accommodate the time zones. We couldn’t be more pleased."
Business Sales (Plan it; Build it; Bank it)

Robert Bennet

Managing Director at Groveley Detection Limited

FPN

Getting you the best deal