So who do you need on your business sale team?
- A good accountant and bookkeeper: Accurate, bullet-proof and timely financial reporting is essential to concluding a deal and securing the confidence of a buyer to invest in your company. Aided by your bookkeeper, your accountant will need to be able to provide the Year End Statutory accounts shortly after the year end and Management Accounts within 2-3 weeks of the month end. They should also be able to provide appropriate tax advice on the various aspects of the sale transaction and the implications for your personal tax position.
- Wealth manager / Independent Financial Advisor: Planning your own personal finances into the future and understanding your own objectives, is key to being comfortable when negotiating and agreeing to a deal. Wealth managers and IFA’s can provide a life-time financial needs analysis which can help you plan effectively, rather than relying on a notional objective value for the business, with careful planning you can work out what you need. They can also advise on how to invest the proceeds of a sale and put in place an effective plan around IHT and other tax considerations.
- Commercial & Corporate Lawyer: Once you have offers on the table which appear to meet your expectations, you will need to formulate and agree Heads of Terms. This document is normally drafted by your business broker or corporate finance advisor, but we would also recommend that your lawyer reviews it too before you sign and progress with DD; key points for them to consider will be the protection of post completion payments and to have a clear understanding of the structure of the deal, and any contractual terms for your involvement in the business post sale. During the process, your lawyer will assist with due diligence, and draw up, review and agree the various contractual documents, such as the Share Purchase Agreement, Consultancy Agreement, Property transfer documentation and the Disclosure Letter. Always ask a commercial lawyer with experience of conducting business and company sales with deal transaction similar in size to yours. Read our further tips on how to choose a solicitor.
- Business Broker: Intermediaries come in a variety of guises from business transfer agents, business brokers, to corporate finance boutiques. Who you select will depend on the size, and nature of your business. Read our article on the various types of intermediaries. In general, your intermediaries will provide their opinion on how buyers will value your business and the types of deal structure you will need to consider. They will then produce the marketing materials for your business, and approach potential buyers, soliciting interest and negotiating the deal on your behalf. Once a preferred bidder is found and heads of terms agreed, they will manage the transaction keeping the momentum on the process, dealing with any commercial issues arising from due diligence and ensuring all parties are aligned.
We hope this article is useful in providing you an overview of who you will need on your business sale team.
If you would like further information, please do get in touch. One of our consultants would be delighted to talk through your plans.