As leading business broker Tim Luscombe can confirm, there are no standard rules about evaluating whether selling a company is a good idea or when to sell a business for optimum rewards.
Mergers and acquisitions, outright sales and collaborative agreements are all part of modern business, but deals do not always work out in the way that they were expected to by key players.
It is imperative to measure the risks and rewards involved in selling a business prior to taking any action. There are numerous benefits to selling a business, moving on to another project or retirement, and mergers could present the wisest option for others.
For every advantage there is a disadvantage which can’t be ignored and should be pragmatically dealt with from a strong position to diminish issues further into the process.
When to sell a business, brand strength, business prosperity, employee factors…there are many areas to mull over.
An expert opinion
Tim Luscombe is a business broker, financial consultant and Thames Valley Business Advisors member who works with businesses, primarily SME’s, on projects from simple transactions to complex mergers and acquisitions.
Here, he looks at the rewards and risks of selling a business.
What is your primary motivation for selling a business? Now, and in the future. The rewards are determined by your response. One example might be long term capital to fund retirement. Another to embark on a new project.
- Improved services and products for customers.
- Better access to internal company resources.
- Organic growth through shared experience and knowledge.
- Better company performance from increased size.
- Reduce costs that come with size.
- Greater access to vendor products and services.
When selling a private sector business or agreeing to an acquisition of a public sector one a risk assessment is essential. No sale is 100% safe so identifying risks like those below places you in a stronger position.
- Confusing customers.
- Alienating customers.
- Disaffected employees who are resistant to changes.
- Complicating or diluting the brand’s strength.
- Complicating the decision-making process.
- Damage to a company reputation.
- Wasted resources.
The lack of pre-defined clarity surrounding selling a business can leave owners in a hazardous position.
Why are you selling a business?
As mentioned above, please ask yourself why you are aiming to sell, your response will dictate the next step and implementation of the idea.
How to achieve this
The next consideration is how the sale, merger or acquisition can be achieved. A comprehensive review of risks and rewards makes the process more positive and considerably less confused or stressful.
Minimise risks; maximise rewards.
Utilising the skills of a professional, experienced business broker proves invaluable for a smooth sale. They’ve been through numerous sales and unlike many of their clients have a full understanding of requirements and processes. As third-party experts, they look objectively at the risks and rewards and communicate the short and long-term ramifications of selling a business. Brokers can help to negotiate a low risk, greater reward deal.
Please contact Tim for more information, he’s eager to hear from you.