Selling Your Business? 7 FAQs Answered
If you're selling your business, it can be hard to know where to start. The experts on our Corporate Finance team at PKF answer your most frequently asked questions about the process and will help you get started on your journey.
What advice would you give businesses looking to sell?
When considering selling a business, it’s essential to ask yourself “what you would do if you were 20 years younger?” This helps in determining whether to sell your business or not. PKF’s corporate finance partners always include this information in the memorandum for potential buyers to see the possibilities. Having a growth strategy is crucial to ensure that the business is always growing, and potential buyers can see its potential. Preparation is key when selling a business as it leads to a shorter price and a less disruptive process. Running a competitive process maximizes value and provides greater opportunities for the owner planning to sell.
If I’m thinking of selling my business, is there anything I should change?
When selling a business, it is essential to carry on with business as usual and focus on continuing to grow during the process, which can take up to five or six months. It’s crucial not to take your eye off the ball. After the sale process, the owner cannot exit the business on day one because they are key to the business, and a strong management team is needed below them. There are different structures that can be put in place when exiting a business. Sometimes the owner is paid 50% upfront, and the rest is earned out over a period of time. This will largely depend on the strength of the management team and how crucial the owner is to the business.
How long does it take to sell my business?
Selling your business can take anywhere from five months to a year. Above anything else, the key is preparation. When you are preparing, make sure you have all your documentation in order. Then, when your business goes to market, the process is much faster and easier. Time kills deals!
Why should I appoint an advisor?
Appointing an advisor when selling your business means that they take the deal off your desk, manage the entire process and ultimately drive the value of your business to maximise your return. Selling your business is quite a sizable transaction at the end of years of hard work. You’ll only sell your business once!
Is the process kept confidential?
Our process at PKF is kept as confidential as possible. All parties will sign a non-disclosure agreement ahead of receiving any information about the potential sale. We always tell our clients to not inform many people of your intentions to sell and try to keep it to a tight number of people within your company. We at PKF try and keep it as tight as possible and when the business goes to market, run it as fast as possible so that the process is painless. At the end of the day, you as the business owner need to continue to run your business as usual while you go through the process.
What is my business worth?
The worth of your business depends entirely on the market. The valuation team at PKF can perform valuation on other transactions in the marketplace and other listed businesses, but at the end of the day the value of your business is what someone is willing to pay. In any process, our partners at PKF always try to position your business in the best light with good growth potential, great people and an attractive proposition for anyone looking to buy.
What gets someone the best value when selling their business?
What gets the best value is running a competitive process, or dual process. This means talking to your trade buyers as well as private equity; these two competing against one another will help drive the value of your business up. If we’re able to reach out to an international network, there may be a strategic buyer who is looking to come into Ireland and that can also drive up the value of your business. Our corporate finance professionals within PKF are always reaching out to our international colleagues to take a presence in Ireland, and whoever is your buyer will see a strategic value in your business.