Webinar recording: selling your business for you, your team and your new investor
We recently hosted our latest in the series of ‘Selling your business’ webinars which looked at acquisitions from a buyer’s perspective, exploring the things acquirers focus on and the work they carry out when assessing a potential acquisition.
There is evidently a lot for business owners to think about when preparing their businesses for sale, but what do buyers find most important when considering an acquisition? Are you confident that your business is attractive to a buyer and that you are set up for growth? Read on for top tips on how to buy a company, so as a seller, you can create the optimal opportunity for your sale.
What sellers need to know about buying a business
It’s important for business owners who are selling to consider the experience and mindset of the potential buyer. We spoke to Barrie Brien, CEO of STRAT7 and Simon Rhind-Tutt, Founder of Relationship Audits, to get their perspectives as to what buyers prioritise when evaluating an acquisition opportunity and why, deriving insight from transactions they have recently been involved in.
“I need to make sure the chemistry is not only good at the selling company between their management team, but also that the chemistry with our management team is really strong.”
Barrie Brien, CEO of STRAT7
“Trust and organisation are most important. Everybody wants the deal to go through as quickly as possible, so being organised and devoting time to preparing for the preparing for sale is key.”
Simon Rhind-Tutt, Founder of Relationship Audits
Top five tips for selling a business
1. Illustrate how you’re a good strategic fit
Buyers need to be confident that the businesses they’re looking to acquire have similar focuses and aspirations for growth. Often they will look to make an acquisition that bolsters their existing offering. As a seller, you need to demonstrate that you can bring something valuable to the acquiring company and align with their goals and values. Read our blog on top tips for a successful sale for agency owners.
2. Showcase your vision and culture
Chemistry and ambition are critical to success. Buyers want to see that those in your management team get on, have a clear vision for the future of the business and are committed to making it happen. There needs to be healthy interaction between your team and the acquirer’s team, to build up a high level of trust, align goals and create a platform for innovation and opportunity. Watch our webinar here which highlights how interpersonal connection is as important as the finances.
3. Define your growth strategy
Buyers want to invest in potential. As a seller, you must demonstrate that you have a robust growth plan in place. What is your strategy for retaining existing clients? How do you go about winning new clients? Are you being innovative in the development of your product or service offering? Do you have ambitions to expand internationally? Acquirers want to know how they can help your business grow, but there needs to be a strong starting point. You can find more strategic growth information for SMEs here.
4. Prove you have robust financials
Make sure your books are in order as this will save a lot of pain in the long run. Buyers want to get deals done quickly and smoothly, so having an efficient month-end process to deliver up-to-date financials throughout the process is crucial. Invest in good advisers who will help you get your accounts and processes into a good state and provide any necessary tax advice in a proactive manner.
Find out how we can help you get your accounts into shape with our audit and business and corporate tax services.
5. Show your ability to attract talent
There is currently a talent war going on. Businesses are finding it hard to attract good candidates and there is a general shortage of skills across many industries which is proving a barrier to growth. You want to assure your buyer that your employees are happy and that you’re doing all you can to recruit the best talent. Happy employees are your best advocates and motivation and passion are contagious. Take the time to find out what they really think and address any issues that could be a cause for concern for them and your future employees. Check out our top tips for attracting talent here.
How to buy a business in the UK
Buying a business in the UK has many benefits; it’s one of the world’s leading financial centres, it has a favourable and innovative business environment, and purchasing a business in the UK is quick – transferring business ownership takes approximately one to four days.
Whether you’re looking to enter a new market or spend an investment, buying a business can be a great way to make a profit, but it’s not without its pitfalls and risks. There are many comprehensive guides available to buying a business in the UK, but the key holistic factors to consider and action are:
1. Research the industry and its trajectory
The first step when considering buying a business is to thoroughly research the industry from every angle. It’s important to know the micro and macro social, political and economic factors affecting the sector’s growth.
2. Audit the business inside and out
From the staff to the accounting and business structure, it’s important to understand every aspect of the operations, in order to comprehend what you might be taking on and what might need improving or even overhauling.
3. Understand the customer and competition
Consider the business’s product the centre of your universe – the two factors that will affect your universe are customer demand and the competition.
4. Decide how you’ll buy the business
There are many ways to purchase when buying a business. From a full upfront payment to turning to a lender for capital to buy, you should consider all the options. Getting financial planning advice is the best way to get an overview of your options and best practice advice from a professional.
5. Consider your level of involvement
If you’re looking to become a fully fledged business owner, it will likely require hands-on management. But if you’re keen to simply invest in the business and stay hands off, you can buy shares in a limited company and you’ll get a share of the profits plus decision making capacities.
Talk to us about your business
If you’re thinking of selling or buying a business, talk to our experienced team of corporate finance advisers today.