As an entrepreneur, you’ve invested immense time, effort, and energy into building a successful business.
When the time comes to consider selling, the question arises: can you handle the sale process yourself?
With your "can-do" attitude and multi-skilled background, it's tempting to think you, alongside your longstanding accountant and lawyer, can tackle the process.
Perhaps you may consider working with a broker to facilitate the sale but is the support they offer enough?
Working with a Corporate Finance Advisor could (and should!) make a crucial difference to your business and the value of it so let’s explain why.
The Role of Your Accountant and Lawyer
Your accountant is vital in ensuring your financials are accurate, organized and up to date, which is essential for preparing your business for sale.
Whilst your lawyers can help draft, negotiate, and finalise contracts that may make or break your deal.
Together, they form a strong team and have no doubt supported your business, but there’s more to closing a successful deal than having your house in order. .
What About a Broker?
Brokers often support smaller business sales, and their pitch can be appealing. They provide high-level financial analysis and market your business to a wide pool of potential buyers, assisting in initial negotiations.
However, many brokers don’t assess your readiness for sale how best to address any issues and often leave you to manage the critical negotiations process on your own. which is where deals often fall apart.
They do not provide depth in terms understanding key drivers and complexities behind business, critical when preparing financial models or negotiating the terms of the deal.
Over 75% of business sales fail on the first attempt, and up to 50% of value can be lost due to basic mistakes. Without expert guidance, you risk missing out on opportunities or making costly errors.
The Value of a Corporate Finance Advisor
The right Corporate Finance Advisor brings experience from handling dozens, if not hundreds, of deals like yours. They understand market trends, valuation strategies, and deal structures, helping you maximise value and avoid costly pitfalls.
Corporate Finance
Read more about Corporate FinanceRead moreOver 75% of business sales fail on the first attempt, and up to 50% of value can be lost due to basic mistakes.
Here’s how a Corporate Finance Advisor like MHA Corporate Finance can support you:
- Creating an Exit Strategy Your advisor will help you craft a well-thought-out exit strategy, increasing the likelihood of a successful sale and maximising your business’s value. They’ll explore options like Management Buy Outs (MBO), trade sales, Employee Ownership Trusts (EOTs), or Private Equity (PE) transactions, helping you choose the best path depending on what you want to achieve as a shareholder. Whether you're preparing for a full exit or a change in shareholding, a clear strategy can help you build an exit strategy with the end goal in mind.
- Preparing Your Business for Sale MHA Corporate Finance are a team of qualified accountants, this means that they can create a robust financial model, providing forecasts that can stand up to the scrutiny of potential buyers. They are also able to quickly understand the key drivers behind your business and ensure these aspects are reflected in the deal structure to maximise shareholder value. Their thorough preparation ensures your business is ready for sale.
- Valuing Your Business An advisor will conduct an initial valuation, based upon current market activity and expertise and will guide interested parties regarding your value expectations. This early-stage engagement is key in setting the tone for negotiations.
- Funding the Transaction If you’re considering an MBO or EOT, a Corporate Finance Advisor will help you explore funding options, including Private Equity or debt. They'll ensure your business is presented in the best light to secure the right type of funding.
- Finding the Right Buyer For those considering a trade sale, your advisor will focus on a highly targeted approach, rather than the scattergun method often employed by brokers. MHA Corporate Finance’s global reach through the Baker Tilly network ensures access to strategic buyers both in the UK and overseas.
- Preparing Sales Documents and a Data Room A detailed review of your company’s operations is essential to compile sales documents and set up a data room. This ensures that financial, legal, and tax data are fully prepared for the due diligence process.
- Negotiating the Deal Negotiation is where deals are made or broken. Your advisor will take the lead in liaising with interested parties, inviting offers, and evaluating them with you. Their experience in handling complex transactions and their understanding of market dynamics ensure you receive the best deal possible.
- Closing the Deal and Post-Sale Considerations Closing a deal involves far more than simply accepting an offer. Your advisor will work closely with your legal team to negotiate the terms of the Sale and Purchase Agreement (SPA), ensuring the final details align with your interests. Just as a specialist CF advisor will deliver significant value during the deal process so will utilising the skills and expertise of a legal team that specialises in corporate transactions. Its important that you have both in your team.
Is DIY Worth the Risk?
Handling the sale of your business is no small feat. While you may have the skills to run and grow a successful company, selling it requires specialist knowledge. The stakes are high, and with so many variables at play, having the guidance of a Corporate Finance Advisor could be the difference between a successful sale and a costly (financial and emotional) failure.
The sooner you begin working on your exit strategy, the better prepared you’ll be when the time comes to sell.
