There’s no doubt that the UK economy has begun to rebound in the wake of the coronavirus pandemic, with this reflected in the value of mergers and acquisitions (M&As) through 2021.
For example, the total value of outward M&As peaked at £6 billion in Q2 2021, with this representing an increase of £4.3 billion in the previous quarter.
Clearly, there’s an opportunity and demand for entrepreneurs to sell their ventures in the current climate. Here are some tips to help you achieve this aim.
#1. Prepare For The Sale Well In Advance
Regardless of the industry in which you operate and your target sale price, it’s crucial that you prepare for the transaction at least one year before you intend to market it to potential buyers.
This period of 12 months or more is crucial, as it enables you to focus on strategic elements that add tangible value to your business and appeal to a broader range of buyers.
Such elements include improving your financial statements and reporting processes, enhancing its consumer base, and reducing costs to guarantee as large a profit as possible.
Execution is key during this time, so be sure to have a clear plan and time frame in mind before preparing to market your business to interested buyers.
#2. Set An Accurate Value For Your Business
Ultimately, selling your business is only beneficial if you’re able to realize its market value, as otherwise, you’ll risk offloading a potentially lucrative business venture for less than it’s worth.
But how can you accurately appraise the value of your business? Well, it’s important to factor in any items of proprietary technology or intellectual property that underpins the venture, while including the value of tangible assets such as property, equipment, and overall lease agreements.
If you’re really struggling, you could even hire an independent business appraiser, who can expertly value your venture and ensure that it enters the market at the optimal price point.
Of course, you can add a small premium to this, as this affords you a little flexibility when negotiating with buyers.
#3. Get The Timing Right
Even with the right preparation, you may still need to be patient when selling your business in order to get the timing right.
For instance, many companies make the final decision far too late, making it hard for them to prepare thoroughly or achieve the optimal resale value.
Conversely, some entrepreneurs are hasty and sell at a time when the market conditions are far from optimal, creating an imbalance between supply and demand and impacting the price accordingly.
Ultimately, timing is everything when selling your venture, just as it is with every decision that we make during our lives.