Selling a business: how to make it a success

Motivation for a business sale

The motivation for a company sale or the sale of a business operation can be different. Strategic reasons come into question. If you determine that a business unit does not fit strategically with your company’s target orientation, you can dispose of this business unit. It is possible that this business unit is more valuable to a buyer than it is to you. This can result in a win-win situation.

You may want to part with your business because you want to retire. In that case, a classic business succession plan is on the horizon. You need to initiate a business transaction process, whether you are transferring your business interest to one or more employees or you are looking for a buyer outside your company.

You may want to sell your business or a portion of your business to strengthen your liquidity.

Preparing for the sale of your business

Prepare your business well for a sale. Only the future expected cash flows to the shareholders count for the business valuation. Set aside sufficient time to strategically align your company and operationally trim it in such a way that the most positive perspective for earnings development becomes apparent. This will allow you to make a credible case for optimal enterprise value.

Once you have made your company fit for divestment, calmly compile all relevant information about the company so that you can present your company in a (virtual) data room.

Now it gets concrete: decide on a share deal or an asset deal, ideally with the support of your tax advisor.

Now create a meaningful and attractive sales exposé and derive from it a OnePager as a “teaser”, which you first anonymously introduce to potential interested parties via experts for business brokerage. You have thus initiated the systematic candidate search. For further steps, be sure to obtain a comprehensive and enforceable confidentiality commitment from the prospects. A lawyer experienced in M&A can help you draft a suitable, pragmatic confidentiality agreement.


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