Objectives and Measurement - As soon as a Business Owner entertains the idea of selling their business, they must set a series of personal and business related objectives and measures to ensure the desired outcome is achievable. The importance of this phase is summed up by the quote; "If you don't know where you want to go, any path will take you there".
Business Sale Preparation - With objectives and measurements set, it is now time to plan and execute strategies to maximise the value of the business to a targeted type of acquirer leading up to the Business being officially 'on the market'. As a potential acquirer will commonly look to past financial performance for valuation purposes, it is best to ensure that value maximisation outcomes (increased sales, increased efficiencies and increase profits) have a chance to been seen on the financial statements. As such, DRIVING DELTA's participation through this period can be variable and dependent on the Business Owner. It is the steps taken during this period that will have the largest impact on valuation.
Business Exit Plan - When it is time to commence the sale process, an Exit Plan is determined to ensure the Business Owner has considered all required aspects of selling their business including . The Business Exit Strategy details the intent as to how the business sales process will unfold and the critical activities that only the Business Owner can undertake. An Exit Plan provides the Business Owner visibility of the process moving forward and acts as a playbook for what is required of the Business Owner throughout the process.
Valuation - Critical in understanding the potential outcome of a business sale is the expected monetary outcome to be experienced by the Business Owner. The Valuation undertaken here will utilise common valuation methodologies used in the market and also consider the likely acquirer of a business and how they may value your business. As value will be different for different potential acquirers, it is vitally important for marketing purposes that the value drivers are identified.
Teaser & Information Memorandum (IM) generation - This aspect of selling a business is often performed very poorly by advisers who do not understand the specific business and its value attributes. Commonly the offending advisers also get remunerated only if the business sells and as such are more eager to 'move the stock' to whomever they can than to spend the time to determine the most suitable acquirer. The Teaser is an anonymous and short description highlighting the best parts of your business. For those potential acquirers interested in learning more, a confidentiality agreement is signed and they receive a detailed marketing document called an Information Memorandum that provides extensive information on your business to allow them provide an offer. Both the Teaser and IM should be tailored to the targeted acquirer, listing the value attributes that will best appeal to them.
Transaction Strategy & Negotiation - Nobody can sell your business better than you, the business owner. Accordingly, should an offer be progressed it is common for the acquirer to want to meet with you to discuss the business. This is commonly a very intrusive period where they may look to undermine your confidence in what your business is worth. Deal fatigue is common for both the Business Owner and Acquirer, and as such it is beneficial for an adviser to be involved to ensure emotions do not lead to unwise decisions.
Post-transaction wind-up - With the your business now sold, there may be some aspects that require finalisation. DRIVING DELTA can assist with these items as by the end of the negotiation period, as some Business Owners have not been able to handle these aspects resulting in some contingency payments being forfeited. Depending on its involvement leading up to the sales process, DRIVING DELTA is available to provide the common training to the new owners that is commonly expected of previous business owners.
DRIVING DELTA principals have participated in several buy-side and sell-side transactions. For more information on DRIVING DELTA's Sell-Side services and how they can assist you, Reach out today!