Sell my business – exploring an alternative exit route to company liquidation
If your business has reached the end of its lifetime, you may explore numerous exit routes to calculate how much you are likely to generate in returns, the length of the process and the costs associated. First and foremost, the path you take will be determined by the health of your business – whether it is solvent or insolvent. If your business is viable, healthy and has growth potential, the routes available to you are likely to be vast, however, if your business is financially distressed, your options are likely to be limited.
If your business is generating substantial profit, scoring targets and hitting new benchmarks, you may decide to explore a route other than company liquidation to secure a long-term future for your company by transferring ownership to an interested party. You can preserve the company structure and transfer your livelihood to a buyer with a similar appetite and skill set as to when you first established the business which has captured your efforts and investment since the day of its formation.
Alternatively, if your business is experiencing financial difficulty, creditor pressure and legal action, you are susceptible to being pushed into compulsory liquidation if you fail to seek a company restructuring solution in time.
Selling your solvent business can result in realising the efforts of your investment in financial form and ensure the continuity of your company. By seeking expert help and accessing renowned support services, you can source a buyer for your business in record time and make a cost-efficient exit. The route you take may also be determined by your reason for exit, such as owner retirement which is likely to shape a tighter time frame.
Step 1 – Sourcing a business transfer agent
The route you take to sell your business may vary, however, a common option is to enlist the services of a business transfer agent. Taking this path can unlock access to valuable industry knowledge and sector understanding which can only be found by working with industry veterans. An agent can help you throughout the process, mediating information between prospective buyers and the seller. In addition to sourcing a reputable buyer, a business transfer agent can offer company valuation services and assist in sale negotiations.
On the other hand, you may decide to seek the services of a business sale broker or choose to pursue your end goal privately. A broker can help advertise your business to a private and public database, in addition to using online company sale platforms on your behalf. Some company directors highly familiar in the business disposal and transfer trade may take this route because they have connections which are readily available and avenues they can access easily.
Step 2 – Conducting a company valuation
A company valuation or market appraisal is essentially an exercise conducted by a business valuer to assess the financial worth and value of your company. By taking into consideration company assets, liabilities, profit and loss and other factors, a valuation specialist will be able to provide an estimate of how much your business is worth and the market value. This not only helps establish an asking price but also assists in narrowing down the pool of prospective buyers suitable to take up this opportunity.
A veteran business transfer agent should be able to help prepare your business for the company valuation process, sharing suggestions on how to maximise sale value.
Step 3 – Preparing your business for sale
To conduct a company valuation, you will need to provide a series of financial records to illustrate the performance of your company. Before advertising your business to prospective buyers, you will need to collate information concerning the health of your company, such as overheads, financial targets and establish a window into your business. This will also assist during the due diligence stage and reduce the likelihood of delays.
Step 4 – Advertising your business & sourcing a buyer
Depending on the route that you take, your business will now be rigorously advertised to a database of registered buyers actively searching for an acquisition opportunity in your sector. If successful, you will receive expressions of interests, leading on to a serious offer(s).
It is not uncommon for exiting company directors to sell their business in parts by auctioning off profitable arms to generate greater returns. If you employ staff or operate in an information sensitive sector, you may request for your business to be marketed discreetly to restrict information leaks and to protect staff.
Step 5 – Negotiating a sale price
Following the successful completion of stage 4, you will aim to negotiate an offer which matches market value, as established during the company valuation stage. Based on years of experience in the industry, your business transfer agent will be able to gauge the appetite of buyers and advise you accordingly on settling on a final price, leading to completion.
Speak directly to a business sale agent or a licensed insolvency practitioner if your business is distressed to explore the routes available to you. When selecting a business transfer agent, it is instrumental to explore their specialisms, track record and success rate to give your business the best chance of attracting a genuine buyer.