Selling your Business

Selling a business is likely to be the largest and most important financial deals you will make and unless you have experience in this field it can be daunting. There are many things to take into consideration:

The sale of any business is time consuming and stressful, and it is advisable to seek professional guidance at the outset. Experienced advisers are essential for an effective sale. The right adviser can have a big impact on the success of your sale and the amount you receive for it.

Sterling Capital Reserve can guide you through the sale of your business, helping you decide the timing of the sale, we can find you potential purchasers, preparing the business for sale and negotiating terms on your behalf to ensure you get the best deal.

The Value of Your Business
Factors affecting the value of your business:

Preparing Your Business for Sale
The earlier you start preparing to sell your business, the better your chances of success will be. The more confidence a buyer has in your business, the more attractive your business will become. A strong management team can be attractive to some buyers, if your business is too dependent on yourself, it may affect the price at which you are able to sell. Good deputy/department managers and key employees who are motivated could be just what a buyer is looking for.
Selling the business when there is a new set of audited accounts available reduces uncertainty over the trading position and the assets being sold.

You should ensure your business complies with Health and Saftey and Employment legislation. Any legal disputes would preferably need to be resolved before considering a sale.

Sterling Capital Reserve can help with this process, identifying any areas of the business that require improvement, which any potential purchaser would otherwise use during negotiations to drive the price down.

By presenting the business in a favourable light and preparing solid forecasts and strategies to show purchasers the future potential of the business, we work towards securing the best deal for your business.

It is important throughout the process to continue operating the business as if you were going to continue in ownership.

Project Management

As professional advisors, Sterling Capital Reserve can take the stress out of selling your business by managing the sale on your behalf.

When we receive an initial enquiry we are able to assess the potential purchaser to eliminate time wasters and to establish whether they can actually afford the business. We are then able to negotiate with interested parties, attend meetings and ensure that you get the best deal.

Once a sale has been agreed and solicitors appointed, we liaise with all parties to keep within deadlines and to promptly address any issues that arise.

Preparing a Sales Memorandum

The Sales Memorandum is used to attract potential buyers, and both its content and presentation are of the utmost importance to illicit interest in your business.

The document will provide basic information about the industry you are in, key financial information (turnover, profit, value of assets), location of premises and staff.

It is essential to draw out and emphasise the strengths of the business, highlighting any opportunities for growth or increased profits. Areas for improvement should also be addressed at this stage to prevent any problems later on. An honest and open approach will gain the trust of any potential buyer and assist the sales process.

Anything misleading in the sales memorandum will adversely affect a buyers interest, and will ultimately affect the price they are willing to pay.

Sterling Capital Reserve can prepare a concise and informative sales memorandum on your behalf, highlighting the full potential of your business and encouraging further interest from suitable buyers.

Finding a Buyer

You will no doubt have views on potential buyers you want to include and exclude from the marketing process, so we work together with you to draw up a list of possible buyers, which may be either trade buyers or even new entrants to the industry sector.

We draw upon your knowledge of the market, and any prospective buyers you may have already identified, as well as targeting potential purchasers held on our own corporate finance database. Our knowledge of acquisitive parties, along with the many contacts we have in the corporate finance community, allows us to identify trade and non trade buyers or private individuals that may be looking to enter the market.

Confidentiality

Maintaining confidentiality is crucial to a successful sale. Once a prospective buyer expresses an interest we require them to sign a confidentiality agreement (which prevents them discussing the sale with any third party) before providing any further information.

Information is restricted throughout the process, and your business name is not divulged until there is a serious buyer in the frame.

© 2011 Sterling Capital Reserve Ltd - Sterling Capital Reserve are members of the National Association of Business Finance Brokers

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