Every year, hundreds of business owners consider selling their business. Sell a business is often "an exciting and emotional process" and one that "requires expertise, diligence and calmness.
Despite the corona crisis, the takeover market is flourishing as ever. However, we do see that buyers are doing their homework extra well in the various stages of the sales process. Typically, there are three clearly distinguishable steps in the sales process:
The first (half) step: preparing for a possible sale
Actually, the sales process begins before the first concrete steps are taken, as soon as you start thinking about a possible business transfer. Look at your business with a buyer 's eyes. For example, how is management set up and is the right management information available?
This is also a good time to get cautiously acquainted with potential buyers (have an investor over for coffee) and advisers to get a feel for how they view your business.
Step 1: sales preparation
The first step in the sales process involves preparing the information, which potential buyers need to form a picture of your business and make an indicative offer. This information is presented in a (usually anonymous) teaser and an information memorandum. The latter document is made available after signing a confidentiality agreement.
During the preparation, we also take a critical look at the company and anticipate issues that may come up during the book review, for example, the impact of the corona crisis. A shortlist of potential buyers is also drawn up at this stage and the sales strategy is determined.
Step 2: approach potential buyers
Then the selected buyers are approached. First with the teaser, then they receive the information memorandum and, if there is sufficient interest on the part of the potential buyer, this results in an indicative offer.
Usually one party is chosen to negotiate further with on the basis of exclusivity. To choose the right party, the bids are compared on aspects such as price, conditions and deal security.
Step 3: negotiating the deal.
After the indicative offer has been worked out in a letter of intent, the buyer begins the bookkeeping investigation and the drafting of the final purchase agreement. Currently, buyers are extra critical and are, for example, asked about the consequences of the corona crisis and how the company is dealing with this.
The results of the due diligence are then reflected in the warranties and indemnities that the buyer will request in the purchase agreement, or may even lead to an adjustment in the purchase price or the cancellation of the deal.
After the purchase agreement is negotiated, it is signed at the notary and the deal is final. With that, all that results is the closing dinner to celebrate the successful business sale.
