BUSINESS FOR SALE
Discussion
Never sold a business myself, but thats something I hope to be able to do in the future.
Loads of people are interested in buying businesses that are up and running, but they will want to know the reasons for you selling. Get that wrong and it might be hard to do so.
Possibles:
Your employees, might want to buy. Safeguards their jobs and direction - Commonly called Management Buyouts, often needs outside capital via a bank or a venture capital company depending on price.
Your competition might want your customers, cheaper than acquiring new customers, premises, staff, but you need to be very careful as some will spend shedloads of money just to get a look at your way of working, pricing etc and then come up with a sticking point not to buy, having then acquired a great deal of knowledge. Probably ways round it.
Venture capitalists - looking to get something cheap and sell on for a vast profit.
The list goes on......
Loads of people are interested in buying businesses that are up and running, but they will want to know the reasons for you selling. Get that wrong and it might be hard to do so.
Possibles:
Your employees, might want to buy. Safeguards their jobs and direction - Commonly called Management Buyouts, often needs outside capital via a bank or a venture capital company depending on price.
Your competition might want your customers, cheaper than acquiring new customers, premises, staff, but you need to be very careful as some will spend shedloads of money just to get a look at your way of working, pricing etc and then come up with a sticking point not to buy, having then acquired a great deal of knowledge. Probably ways round it.
Venture capitalists - looking to get something cheap and sell on for a vast profit.
The list goes on......
OK so you have a two year window to prepare your business for sale.
First you need to make yourself, and your spouse/kids if they work for the business too, dispensable.
Your idea of employing someone to run the business: do that. Get them experienced as a Manager and slowly but surely reduce your contact with the business to supervision.
Your business is now saleable for a reasonable multiple of turnover/profit. You should employ a law firm/accountancy that specialises in the sale of businesses to represent you and ensure that "due diligence" does not expose your IPR unduly.
I've been through the due diligence process when we sold 17% of our business a few years ago. We didn't need to become "hands-off" managers as we intended to continue working in the business for an extended period.
First you need to make yourself, and your spouse/kids if they work for the business too, dispensable.
Your idea of employing someone to run the business: do that. Get them experienced as a Manager and slowly but surely reduce your contact with the business to supervision.
Your business is now saleable for a reasonable multiple of turnover/profit. You should employ a law firm/accountancy that specialises in the sale of businesses to represent you and ensure that "due diligence" does not expose your IPR unduly.
I've been through the due diligence process when we sold 17% of our business a few years ago. We didn't need to become "hands-off" managers as we intended to continue working in the business for an extended period.
You have a great reason for selling on, and that alone should make it easier to sell and get more money for it in the process.
There are no problems with signing non-compete clauses with regard to your former customers and you may even get them to employ you while they get into the swing of things. i.e. continuity of a successful business during handover is more likely to go smoothly and preserve the client base.
There are no problems with signing non-compete clauses with regard to your former customers and you may even get them to employ you while they get into the swing of things. i.e. continuity of a successful business during handover is more likely to go smoothly and preserve the client base.
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