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Three Emotional Issues To Face BEFORE Putting Your Company Up For Sale

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Before putting their business on the market every business owner needs to face up to some difficult emotional decisions.

The decision to put a company up for sale throws up a complex web of financial and emotional issues for any business owner. In many ways the emotional issues are the most challenging. Before starting out on the sale process you need to look at yourself in the mirror, and give honest answers to some difficult questions. If you are not settled on these issues before the sale process starts, indecision as the transaction unfolds can delay or even stop completion.

So What Are The Questions That Need To Be Addressed?
Do I want a continuing role in the business going forward?
You may want to remain with the business as Managing Director, or in a less involved but more strategic role such as Chairman or consultant. Perhaps you want to limit your role to sales or product development. Alternatively you may want to make a complete exit as soon as possible after the sale. You need to be clear about this to potential buyers at the start of the process or any deal may fall apart before it completes. It is no good offering a continuing involvement to draw in buyers, and then ducking away from any contractual commitment to stay on.

Is it important to me that the company remains intact?
In most sale processes there are two most likely outcomes. The business remains an independent subsidiary of the buying company, or the people, products, assets and customers are dissolved into the acquiring company. The latter outcome often commands a higher price as the buyer has more opportunity to make savings by removing duplicated costs. Is the money or the legacy most important to you? If the latter your broker will guide the search for a buyer in the direction of companies that because of their geographic cover, or operating structure, are most likely to run your company as an independent subsidiary.

Do I want to protect the employees at all costs?
Do you recognize that some reductions in the workforce are inevitable for a buyer to justify a full offer price, or are you prepared to accept a lower price to reward employees’ past service? The choice may well be that stark. Your broker needs an honest answer to this question at the start of the process to guide the buyer search.
Recognising That Once The Business Is Sold Decisions Are Out Of Your Control
There are of course no long term guarantees on any of these issues. No buyer will make contractual commitments to your continuing involvement, or to maintaining the structure of the company indefinitely into the future. There is however the satisfaction that comes from finding the best available outcome for the future of the company, and its employees.


If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

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