The takeover market is picking up after a period of relative calm. Energy prices are back to reasonably normal levels and so are transport costs from the Far East. The fear of consequences of the war in Ukraine is far from over, but seems embedded in everyday life. If you are thinking about a possible sale, it is nice to know that the market is picking up. But what else do you want to know?
Legal
First of all, you need to ask yourself whether the legal structure of the business is in order. Suppose you invested in your own business premises years ago and you want to keep them after selling your company and start renting them out. Then it is important that the premises are not in the operating company to be sold, but preferably in the (intermediate) holding company above it. This also immediately makes financing the acquisition by the buyer a lot easier.
Organisational
Another issue is the organisation of your business. The company will have to be less dependent on you. This can be done by transferring certain tasks and responsibilities to your employees. However, sometimes it is necessary to hire someone to do so. Even without you, the business should be able to continue running smoothly. Incidentally, this is also important when you are not selling your business. Administrative and other business processes should be well described. An ISO certificate can be good proof of this, but good financial reporting is also important.
Activities and costs
To maximise earnings, it is important to look carefully at the various activities and costs of the business. Sometimes, before entering the sales process, it can be a good idea to sell or stop activities that do not contribute enough to the bottom line. Look closely at costs. Terminate unnecessary contracts and look closely at where you can cut back without affecting the bottom line. Often, fat has built up in the organisation unnoticed and if you cut that away before selling, it makes extra money. Getting your customers to pay faster or just a bit more generous payment agreements with your suppliers can also increase value. Selling surplus assets reduces interest-bearing debts, increasing the value of the business.
Value
As an owner, you may have an overly optimistic expectation of the value of your business. You want to adjust that to a realistic expectation. Value can be determined in many ways, but also depends heavily on the market and the moment. In the press, you often read the success stories of young innovative companies being sold for multiples of revenue. In practice, however, SMEs in mature markets with what is called perfect competition currently fetch on average 4.75 times gross operating income.
Opinion
Finally, it is good to know that a sales process is complicated. That is why it is a good idea to hire a professional adviser. They will take a lot of work off your hands and can approach the right potential buyers. This also ensures that you can keep busy running your business yourself. After all, the whole process takes around six to nine months, sometimes even longer.
