There are several ways that you can achieve a sale of your business. The options can seem confusing and are often over-complicated by jargon. After a review of your business and your exit objectives by our ‘sell-side’ experts, the best option will normally become apparent. A single track or multitrack sales process can include one or more of the following:

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Option 1 – Selling to Trade

This where a trading business purchases your business, commonly with the intention of integrating it into the larger organisation. It is the most common and straight forward transaction to understand. However, to achieve a trade sale your potential buyer must be convinced of the strategic benefit of buying your business and bringing it into theirs.

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Option 2 – Selling to Private Equity

Private equity looks to buy businesses, grow them, and sell for a profit. This will see your business maintained as a separate entity - for the time being. Your business must have good organic opportunities for growth a strong management team and good prospects for its eventual onward sale to trade or a future public listing.

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Option 3 – Selling to your leadership team in a Management Buyout (MBO)

A management buy-out (MBO) is where your management team makes an offer to buy your business. Commonly a seller will initiate such conversations, but this must be done with extreme care. An MBO can be funded by private equity, debt, vendor deferred, vendor rollover or a combination of each.

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Option 4 – Employee ownership trusts (EOT)

An Employee Ownership Trust is a tax efficient way to transfer the ownership of your business to your employees. Currently a sale to an EOT attracts material tax relief for the seller. Such deals are funded buy debt and vendor deferred or vendor rollover.

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Option 5 – Listing your business on a public market

Listing your business, typically on the Alternative Investment Market of the London Stock Exchange (AIM) where all, or more typically, a proportion of your equity is sold to the public. Listing is an authorised activity that we are unable to advise on, but we can assist you in finding the right advisors if this is your chosen route.

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We work with owners of UK based privately-owned SMEs worth £10m or more that are ready to sell all, or part, of their business. We offer strategic advice and support to ensure the sale happens smoothly and to make sure the right price is paid by the right buyer

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See our deals and success stories.

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A business sale can quickly go wrong when owners start the process under-prepared or in an opportunistic fashion. Here are some common mistakes made by owner-managers when placing their business for sale:

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• Failing to understand the different exit options and choosing to pursue the right one (or ones) for you;
• Entering into any process without being fully prepared;
• Failing to take control of your exit assuming that it will just happen;
• Underestimating the demands a sale process places on senior management and its impact on business performance;
• Poor understanding and articulation of the business's value proposition, its value drags and value drivers;
• Inability to stay three or four moves ahead of the process due to lack of experience;
• Poor communication to stakeholders post deal.

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To ensure a successful sale process and minimise disruption to the day-to-day running of your business, you need to achieve these key objectives:

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1. Set out your exit criteria, thinking carefully about your required net returns and the legacy you wish to establish with employees, customers and other key stakeholders;
2. Undertake a critical review of your business and identify value drags and value drives. Develop a plan to mitigate drags and enhance drivers;
3. Carefully decide on the best business sale option for you and your business;
4. Thoroughly prepare for due diligence covering all aspects of legal, financial and commercial so you are ready to respond to enquires promptly.
5. Take a structured approach to identifying buyers in the business marketplace – which may include your existing management team - and work towards developing and positioning your business in a way that delivers best value to them;
6. Run a structured sales process to your timetable that brings buyers to the table at the same time to create competitive tension;
7. Negotiate skilfully the complex terms that surround a business sale to maximise value and minimise future risk;
8. Maintain professionalism in all interactions to deliver the conversations that build trust with identified buyers;
9. Build an internal and external communications plan to protect value and satisfy the needs of all stakeholders.

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