For every DGA, there comes a time to transfer your business. And whatever the reason, a business transfer is not settled overnight and requires thorough preparation. The advisers at Coralis Corporate Finance therefore advise: start on time!
Jan Dekker and his colleagues advise companies in purchase and sale transactions from their office in Baarn. Coralis Corporate Finance is part of the ZMGroup, in which 100 enthusiastic advisers, tax specialists and accountants assist entrepreneurs on a daily basis.
Jan Dekker points out, "Every business, without exception, must be made ready for sale.
Phase 1: Identifying your needs
Jan emphasizes that the starting point always begins with your motivation as an entrepreneur. "Why do you want to sell your business, who do you want to sell the business to, and above all: what are you going to do after the sale?
- Take the time to answer the most important question: why do you want to sell your business? Do you want to start other activities, or focus on part of your business (and sell the rest)? Or is it time for a well-earned retirement? At this stage, it is nice to be able to spar about this; of course, for confidentiality reasons, you cannot discuss this with everyone. Think carefully about who you can confide in for this. Coralis ' advisers are experienced, independent and maintain strict confidentiality.
- If you want to sell, think above all about what type of buyer you would prefer to transfer the business to. Is there someone in the family who would be suitable? Or one of the incumbent managers? Or rather to a competitor, who knows the market and may be able to offer the best future for your employees? And perhaps you yourself would like to remain active for some time?
- There are several ways to monetize the stake in your business. Suddenly selling all the shares is not the only option these days. You can opt for a partial sale to one or more investors, while remaining connected to the business for a number of years.
Phase 2: Getting ready to sell
A business offered for sale must be in good condition. The figures should not only give an accurate picture of profitability, but also show a clean balance sheet. For example, the balance sheet may contain receivables from the DGA, preferably these are paid off.
- The question to whom you want to sell and your own ideal involvement in your business after the sale will determine how you should prepare your organization. Does management need to be strengthened so that dependence on yourself is reduced? And do you have them in-house, or do you need to look externally? Also look at the dependence on customers and suppliers. The less dependency, the more value your company has for a prospective buyer.
- Is the (legal) structure of your company prepared for a possible sale? What about real estate and a personal holding company? Have you borrowed privately from your company?
Something else: you can consider a Vendor Due Diligence: you have your business thoroughly examined before you go to market. That way, there will be no surprises, you know exactly where you stand and you give buyers immediate confidence.
For each situation, there are undoubtedly other important issues to think about. Our motto is: getting ready to sell starts with a plan and takes time.
