Selling your business is a major decision, requiring careful planning and implementation to ensure you exit at the right time, in the right manner and most importantly realising the potential of the wealth you have created and built up over your years in business.

Success in business is all about creating and then realising wealth in your business and frequently this is only realised when you exit your business.

From our extensive experience in this area, we have become increasingly aware of the need for a business exit/succession plan to enable business owners to achieve the return they deserve when selling their business.  Exiting your business can be complex and at times a daunting experience if not planned properly.  Many complex issues need to be resolved and frequently business owners miss out on maximising the value of their business by not planning an exit strategy.  With the right planning and strategies in place the process can be well managed and more importantly create a significantly greater return by maximising your wealth when exiting your business.

For more information on how to plan and implement an Exit Strategy visit Business Valuation Appraisals & Opinions.

Selling a SME (small and medium enterprise) business valued at over $1 million

When considering exiting from an SME you will need specialist advice from experienced and skilled specialists to ensure a successful exit is achieved and more importantly it maximises the wealth you have built up over the years in your business. 

Like many business owners you will have a considerable portion of your total wealth tied up in your business and if not handled correctly by experienced senior brokers it can have serious consequences not just financially from selling at an undervalued price but also in unnecessary exposure to potential future litigation caused by misrepresentation or unprofessional presentation.

Potential complications can arise from: 

• Not maintaining confidentiality
• Incorrectly valuing the business
• Not pre-qualifying potential buyers and knowing they are genuine
• Identifying the integrity of the buyer
• Incorrectly prepared sale & purchase agreement
• Not managing the due diligence process
• Attracting the wrong buyers through incorrectly structure advertisements

LINK's Corporate division has a proven track record from successfully brokering in excess of 200 acquisitions and divestments of more substantial businesses over recent years.  The combined experience of our team of senior brokers is second to none in this market and their knowledge and experience gives you the confidence in knowing that we have the credentials necessary to guide you through the various stages of exiting your business in a professional and ethical manner.  The following gives you an outline of the approach we recommend you take based on our many years experience.

The Process

Step 1
The first step is to contact us for a no obligation initial consultation; naturally this will be treated with total confidentiality.  A senior specialist broker with experience in your industry will meet with you to discuss your goals, timeframes and reasons for exiting so we understand the issues that are important to you.  After gaining a general understanding of your business, we will discuss with you in detail the process and the various options available to you.

Irrespective of your exit timeframe we would sooner spend time planning with you well in advance as we will be able to suggest steps you need to take in preparing your business for sale.  A well planned and implemented exit strategy resulting from advice from LINK contributes significant additional value to business owners when our plan is followed, thereby maximising their wealth when exiting.

Step 2
Once you have decided to proceed with the sale, we prepare a comprehensive “Marketing Appraisal” document detailing every aspect of the sale process, including a financial summary of past years performance and financial calculations to establish pricing and strategies that will be used to find the right buyer so you are fully informed of the procedure.

Step 3
When the advance planning is completed we then require a mandate for a specified period of time from you authorising us to proceed.

We then begin compiling specific information required by purchasers to include in the information memorandum.  This document summarises the various aspects of the business.  When completed this will be submitted to you for your approval, ensuring all the information accurately represents the various aspects of your business.

Step 4
We will also consult with you on how the business will be marketed.  A comprehensive marketing plan will be presented to you, this will be customised taking into account the specific nature of your industry and business, and will include strategies to find the right buyer.  In many cases buyers are found from our database of qualified buyers which can result in a sale being concluded expeditiously.  We have many potential buyers entering our database each week and when your business is listed with us we firstly look for potential matches in our database.

Should we mutually decide to market the business, advertising conducted will not identify your business and interested parties are pre-qualified and required to sign a confidentially and indemnity agreement before receiving any information.  Maintaining confidentially is of paramount importance and no information is given out until the interested party has been qualified.

Part of this qualification process is to identify the integrity of the buyer, not only must they be able to finance the purchase but they must also be suitable candidates for the acquisition.  We come in contact with a number of buyers who indicate they have the funds necessary to complete a purchase and unfortunately when we qualify them we find their expectation of how much they can borrow to be unrealistic.  This is why we spend considerable time qualifying buyers as it is important that only buyers who can complete the transaction are given the details on your business.  Once again this is the advantage of using an experienced company with knowledge gained from many prior transactions and a large information database to protect you from potentially time wasting buyers.

Throughout the process we control the information potential buyers are given - commercially sensitive information will be withheld until a written offer has been presented thereby restricting disclosure of certain information until the prospective purchaser has indicated they wish to proceed with a purchase.

Step 5
At this point we prepare a “Sale and Purchase Agreement” detailing their offer along with the conditions to be fulfilled prior to the agreement becoming unconditional.

The preparation of the sale and purchase agreement is one of the most important aspects of the sale process.  After negotiating and concluding many acquisitions and divestments of SME’s we have considerable experience in this process and will recommend to you various situations to be aware of and to ensure these are incorporated into the agreement.  We will work with your legal advisors in preparing an agreement to minimise your legal exposure.

Step 6
Once negotiations have been completed the purchaser will, under due diligence, require verification of information supplied, this gives them a specified period of time for themselves or their financial adviser to inspect certain records and documentation.  In preparing your business for sale we will identify with you what records will be inspected so you can ensure these are ready at the appropriate time.

Throughout the due diligence process we liaise between both parties to ensure the conditions of the agreement are satisfied.  This is a very important part of the process and unless well managed by a third party can cause potential problems resulting in a sales not proceeding.

Our job is only completed when settlement and possession occurs.

We trust this overview gives you a better understanding of the process and potential complications that can occur unless managed by professional and experienced senior acquisition and divestment specialists.

Should you wish to discuss implementing an exit strategy or exiting from your business please contact us for a confidential no obligation initial consultation.