Information Required When Selling Your Business
Once you have decided to sell your business you will need to put together an information bank. The more preparation you do up front, the smoother the selling process will be and you will be less likely to face hiccups and delays during the due diligence process.
Listed below is the key information that you should put together:
• Annual accounts (At least 5 years, this is essential information to have up front)
• Up to date profit and loss account, balance sheet and cash flow forecasts
o Details of the cost base and administrative costs
• Details of any loans and outstanding debt • Forecast for next year and if available a 5-year plan
• Details of assets owned (property, vehicles, machinery, stock, fixtures and fittings)
• Stock at value•
. Details of accounting infrastructure
• Sales figures; split by:o Revenue and volume o By product / service type
o Key customers
o Forecasts for the next year and the remainder of this year
• Key Customers
o Contract details
o Length of tenureProducts and services
• Details of key products and services provided
• Key suppliers
o Contract terms
• IT and infrastructure
• Details of staff
o Numbers of staff including directors
o Job roles and descriptions
o Names of staff (brief biography and tenure details)
o Salary and benefits details
• Details of company legal status
• Shareholders details ( all shareholders need to be in agreement to sell)
• Details of contracts and leases
• Details of outstanding judgements or legal issues
• Details of intellectual property rights and copyright
• Registered brands and domain names
• Property details
• Owned or rented. – leases and deeds• Tenure
• Co-tenants / agreements
Sales and Marketing
• Website, social media & domain details ( webmaster, domain name, hosting details)
• Sales and Marketing plan details & costs
• Images and packaging details ( provide good images to help sell your company)
• Data – what data do you hold and what is your GDPR plan?
This list is not exhaustive, but if you can provide the majority of this information you will be very well placed to sell your company. If you don’t have it up front, you will more than likely be asked for all or most of it by a prospective purchaser. Failing to provide it, could slow down, or even halt your sale!
As a farmer’s son I have always been a keen observer of the weather and how it affects the flora and fauna it comes into contact with. There is no doubt in my mind that there are very noticeable clues that our climate is changing.
There is also no doubt in my mind that climate change has always been a factor, much of Britain was once covered in ice and that ice has retreated significantly since these islands were in the grips of an arctic climate. Indeed ice ages have come and gone many times. Previous changes have been driven by mother nature, what is different this time is that mankind is accelerating the change with our carbon emissions.
The majority of rational opinion seems to accept that we are accelerating that change and there is now significant scientific support for this view too. We know there are some significant climate change deniers too. Whilst opinion is moving into acceptance mode, our actions as individuals, organisations, and governments are lagging behind.
True the Paris Climate Agreement which was signed by c. 174 countries in December 2015 looks to limit global temperature gains to well below 2 degrees centigrade this century and most signatories intend to play their part, but it is a voluntary agreement being put at risk by none less than the President of the USA.
Global warming, caused by CO2 emissions released into the atmosphere by burning fossil fuels, currently costs global GDP a staggering $1 trillion in damages p.a. Small wonder the UN, IMF and World Bank have all called for a carbon price: policy makers in government and corporations urgently need this price so they can account for the true cost to humanity of their decisions, activities, and investments.
I firmly believe every one of us has to play their part in challenging the naysayers and to make a contribution to protecting our environment and climate. As well as making lifestyle changes I am delighted to be marketing the World’s first scientifically based carbon pricing company.
Way ahead of the curve, the company I am bringing to market is the ONLY one in the world to have scientifically determined the true carbon price, based on the loss and damage caused by extreme weather events attributable to manmade climate change. This company alone can put a scientifically accurate $ price on this: dollars per tonne CO2 – not just tonnes of CO2.
This company’s exclusive, world leading IP and technology enables a huge range of unprecedented capabilities including: monetized carbon auditing of big-ticket projects like nuclear power plants; measurement of carbon liability of, say, proven reserves of oil companies; assessment of carbon liability Value at Risk (VaR) for asset managers across all industry and energy types including renewables.
So if you want to take a global leadership position in auditing your carbon usage, liability and the what value yours and other organisations have at risk, click on this link and if you are serious I can introduce you to the team.
I am not a climate scientist, climate expert or even a campaigner, but care passionately about this planet and the legacy we leave for future generations. So if I can find a buyer for the company I am representing, whom gives it a platform to ply its trade on a global stage, then I believe I will have made a small (albeit very) contribution to saving this planet. If you know a policymaker, asset manager, consultancy or government or academic body or corporation that is brave enough to take a global leadership position in carbon pricing then please pass this message on.
A question prospective clients always ask me, is what makes you different from the competition? It is very tempting to polish up a gilt-edged response and I guess to a certain extent I have.
My journey to becoming a business broker, has been a long one, I have spent over 30 years running and marketing businesses, along the road I have been involved in a number of M&A transactions, plus in 2007/8 I lead a team attempting to buy a brewery. We were a long way down the line, had a good business plan in place and indeed had an initial financing ready to go. The clue is the year and the credit crunch put paid to our funding. I had to walk away and then spent 7 years running racecourses for the Jockey Club, which gave me strong hands-on experience running businesses.
Throughout the period at the Jockey Club I had a burning desire to own my own business and when I left I embarked on a journey trying to buy a number of businesses. It was that experience that opened my eyes to the fact there is a gap in the marketplace for brokers that really do offer a good service. All too often I found my self in a position where not only was I poorly briefed, but so to were the potential vendors. Talking to those vendors a few key realisations dawned on me, firstly I am extremely interested in small and medium-sized companies; they all have fascinating stories to tell and have in most cases have built excellent businesses. Secondly, my business experience helps me to understand owners, to empathise with them and help them. Thirdly, most of them have no knowledge of buying and selling businesses and need professional help.
Once the realisation dawned on me that there was a gap in the market for good business brokers and that I had the experience and skills to do the role, I started to develop a business model. I did look at a franchise option, but felt that their model was restrictive and that my vision for providing the very best service would only be partly achieved, unless I created my own business brokerage. The first thing I did was invest in my skillset and in training to reinforce my experience and to ensure everything I do is authentic.
Authenticity is important to me so when we created Weybrook Business Brokers there were a number of key principles that we agreed that will underpin the business:
> Every client is important to us
> We will take time to get to know them and understand their business and personal goals.
> We will focus on achieving results – the majority of our remuneration is dependent on achieving a sale or purchase.
> We will work with a limited number of clients and not adopt a volume model.
> Our focus is on selling businesses, helping buy businesses and advising businesses how to prepare for sale,
>We will walk away if we don’t believe we can achieve a sale
>We are with our clients from engagement to sale completion
> Our job is to make the transaction happen, we don’t offer financial or legal advice. We work with commercial lawyers, accountants and financial experts to facilitate deals.
>We don’t send clients to meetings unbriefed and attend all meetings, unless not required.
> We love what we do and therefore that will translate into offering our clients great service. If we care, it makes a real difference and we want to make a difference, whether it is finding the right qualified buyer for a communications agency, bringing to market a world leading carbon pricing specialist or helping a catering company achieve an exit.
>Professionalism, integrity and confidentiality drive our standards.
So to summarise I came to business broking from a strong platform, having run businesses and been through the buying process. I established Weybrook to provide a brilliant service to a small number of select clients. Our model is dependent on making transactions happen and not pocketing a large upfront fee. Above all we are in this business, because we love what we do, are interested in the businesses we work for and strongly believe that translates into offering an excellent and professional service.
“We have to make you aware that his condition is critical and that there is a risk that he may not make it!” those were the words the consultant anaesthetist delivered to my wife and me on Tuesday night. My son was in the back seat of a car that had hit the curb, left the road and somersaulted at high speed. All 4 of the young men who were in the car are in a critical condition, but thanks to the incredible staff of the NHS we are hopeful of a full recovery.
I love working and am building a business, my clients and business contacts are massively important to me, they are the fuel that drives me every day, but hearing those words was a stark reminder that whatever you do, you need to remember that is that it those that you love, that is truly the most important thing in your life.
As a broker I help business owners sell their business, I already encourage my clients to plan for life after their businesses have transferred, the conversation invariably moves to family, that will have even more poignancy from now on.
This accident has brought our family together even more tightly, and our thoughts are with the families and loved ones of the other boys involved. You don’t know what life will throw up, so my message is work hard, but make sure you make time for your family and loved ones.
Our son is still not out of danger, but we are sure he is in the best possible hands, I would like to say thank you to the fire service, ambulance service, police, the A&E and ICU staff at St George’s Hospital who have all played a part in helping. These people are truly special and we will always be grateful. Those that I have managed to speak to, have said they are just doing their job and they are, but you know what, without them, my son wouldn’t be still with us. THANK YOU, YOU ARE TRULY SPECIAL
This is an interview Rupert Trevelyan – Managing Director of Weybrook Business Brokers did with the School of CEOs after attending their Vital Few programme. Please download.
Selling your business is a big decision, it means you will be disposing of something that has consumed your time, energy, passion and investment, not forgetting that of your staff too, so it makes sense to plan and get the best possible return. If over this festive season you are considering selling, here are some thoughts for you to consider:
Is the business attractive to potential buyers? Most buyers will want a viable business that delivers future growth and profit. To do demonstrate this your business needs to show sustained revenue and profit growth over a period of several years. It also needs to continue to function after the existing owners have exited, therefore you need to have a management structure and team in place that is transferable and will keep functioning and growing the business.
Is your business ready to transfer?. Once a buyer has made an offer, a period of due diligence will follow, no stones will be left unturned, so you will need to ensure everything is in order including:
- Certified accounts
- Sales figures
- Customer and supplier agreements
- Contracts and leases
- Shareholder agreements
- Staff contracts
- All legal disputes settled
When to sell? There is no doubt judgment is required to sell in the best market conditions, but if your business is not ready to sell, then you should implement a plan to get there, which could take several years. If you need to put a growth plan and a management team in place, start the process as soon as is possible. Once you have all the right elements in place then you can consider marketing the business. If you want help in preparing your business for sale go to: https://www.weybrookbusinessbrokers.com/preparing-your-business-for-sale/
How to sell. There are ways to promote and sell your business. without getting third parties involved and you may just get an amazing result, however, most business owners are not experts in selling businesses therefor our recommendation is to engage a broker, to help you market the business. You will also need a good accountant to ensure the numbers and accounts stand up and a commercial lawyer well versed in selling businesses to complete the sale. To find out more go to: https://www.weybrookbusinessbrokers.com/sell-my-business/
At Weybrook we are always willing to help – so if you want to find out more call us 07826 050690 or register here: https://www.weybrookbusinessbrokers.com/contact-us/
There comes a time when many business owners want to retire, a proportion of them will sell up and achieve a return on investment for all their hard work, while too many miss that opportunity and wind down and cease trading. It really pays to plan your departure and put in place measures to make your business saleable.
In times gone by many small and medium-sized business owners have passed their business on to family members; this option is not as popular as it used to be, as it is less acceptable to pass a business to the eldest (often male) child and because family members are not interested or capable of taking it on.
The next best option is for owners to sell the business and extract some value from all their hard work. Recent research by Experian Corpfin suggests some 80,000 UK business owners aged over 60 simply stop trading each year rather than selling. This has to be a missed opportunity!
Not every business is saleable but planning ahead and putting in place an exit plan will give owners a fighting chance. Buyers are looking to purchase future cash flow and profit; to deliver that opportunity vendors need to put in place an exit plan that is attractive and delivers ongoing growth. This is not a quick fix and it is never too early to start your retirement plan as it will more than likely take several years to put in place!
One of the key components of the plan is having a management team in place that can continue running the business once the owners have exited. Too many entrepreneurs are integral to their businesses, which means that when they step away, so does the value of the business.
The next component is showing profitable growth at EBITDA (earnings before interest, tax, depreciation and amortisation) level. Many buyers still value businesses by applying a multiple of between 3 and 10 by EBITDA. Therefore, it is important to have finance policies in place that deliver as high an EBITDA as possible over a sustained period of more than 1 year. Hiring a part-time finance director to help you get your finances in order, can reap real dividends at this stage.
Ensuring there are no obstacles that may hinder the sale should not be left to the last minute. Vendors will need to make sure all leases and legal requirements are in order to allow new owners to make a quick change if they want to. All legal disputes need to be settled, customer and supplier agreements up to date and all shareholders supportive of the sale, to avoid difficulties in the due diligence process prior to the sale.
Continuing to grow the business is critical so owners must keep their focus until they exit; declining businesses are not attractive and will sell at a discount, if at all. It is also necessary to maintain momentum and assemble a strong team comprising: a broker to market your business and find appropriate buyers, an accountant to ensure the numbers are correct and give you taxation advice and a good commercial lawyer to look after your interests.
Make sure you don’t miss out and plan for a life after the sale. Good taxation and investment advice are essential, to enable the lifestyle you want and to ensure a happy retirement.
1) What does a business broker do?
Brokers primarily provide brokerage services for clients who are seeking to sell or buy a business. Usually, but not always they act for the seller.
At Weybrook our aim is to provide dedicated support to our clients from the moment we are engaged until the deal is completed. We work very closely with all relevant parties including lawyers, financial advisers and directors. Our point of difference is that we don’t go for a large volume of clients, choosing instead to work with a select few, whom we believe we can close a deal for.
Business brokers perform many duties including:
Conducting an evaluation of a business and pricing it with a professional valuation.
Drafting an offering summary, sometimes called a confidential business review. It becomes one of the most important marketing / sales documents and is provided to prospective buyers only after they have signed an (NDA)Non-Disclosure Agreement and have been checked by the broker.
Marketing the business to the most appropriate audience whilst maintaining strict confidentiality.
Introducing prospective buyers to the business after insuring confidentiality agreements have been signed.
Facilitating/attending meetings between the seller and prospective buyers.
Handling negotiations between the parties after an offer has been made.
Assisting the due diligence process. Offers to purchase are almost always made contingent upon a further due diligence investigation.
Ensuring the buyer has sufficient finance to buy the business. If the broker is not a qualified Financial Advisor this does not include financial advice.
Assisting the scheduling of and facilitating the closing of the transaction.
Brokers can also find prospective target acquisitions for clients.
Brokers can advise clients on action plans to prepare their businesses for sale.
For clients looking to sell businesses go to: https://www.weybrookbusinessbrokers.com/sell-my-business/
For clients looking to prepare their business for sale go to: https://www.weybrookbusinessbrokers.com/preparing-your-business-for-sale/
For clients looking to buy a business go to: https://www.weybrookbusinessbrokers.com/acquire-business/
2) Why did you become a business broker?
I have always been interested in business and businesses. Throughout my career I have been involved in aspects of M&A (Mergers and Acquisitions), including integrating businesses after a merger, demerging and selling businesses, being part of MBI (Management Buy In) and MBO (Management Buy Out) teams. In addition, I have led business turnarounds and merged operations to create profitable businesses. More recently when considering purchasing myself, I discovered a gap between my expectations and the service the brokers were offering in every potential transaction.
Put quite simply I am a broker who loves businesses and at Weybrook our aim is that:
When the time comes for owners of privately held businesses to sell, we help them transfer the business to new owners. We help make that happen by offering dedicated service for a small number of select clients. On completion of an evaluation and agreement to work with a client, we become part of a team looking to achieve the best possible transaction.
I am passionate about giving my clients an excellent service and I believe that sets me apart.
At Weybrook we work with privately held businesses with a turnover up to £20m.