Let no one say 2018 was boring. Brexit talks have stumbled along from drama to crisis with certainty in short supply, and Trump has seemed hell bent on turning the political and business worlds upside down.
Closer to home, high-street retail appears to be on the back foot, and yet big players – the likes of Google, Facebook and Amazon – have suffered something of a ‘techlash’ with governments and consumers starting to take a tougher line over the perceived liberties these companies have been taking with our trust.
And yet, a surprisingly strong global economy and a competitive pound have seen UK exports continue to do well, and our cities are still crammed with tourists.
While it’s true that businesses are resisting to invest heavily until the little matter of breaking up with Brussels is done and dusted, there is still a general feeling that 2018 turned out better than many had expected.
So, with UK business relatively stable, some small business owners who have perhaps been thinking about a business exit may judge that 2019 would be a good time to make their move.
For anyone reaching that conclusion, there really isn’t a moment to lose.
A good exit strategy makes all the difference when it comes to selling your business, and the earlier you get the process under way the better the outcome when sale-time comes around.
So, here’s a review of the important steps in the process.
Why start preparing now?
Because, quite simply, this could be your best chance of securing a reasonable offer for your business. Although trading has been mostly steady up until now, there are no guarantees 2019 will continue in the same vein.
If the UK is soon to enter a period of reassessment and reinvention, 2019 may be the best opportunity to sell a business which is on a sound footing.
That also means time is short to get your house in order and identify any further opportunities to grow and add value to your business. In terms of an exit strategy, boosting the worth of your business and finding ways to make it even more attractive to potential buyers is the best way to increase your likelihood of selling fast once your business goes on the market.
Besides getting your core business records into good order so they clearly reflect your company’s great track record and growth potential, you should also look at updating your technology (including your website) and ensuring your working practices align with current trends in your industry.
It’s not just ‘dinosaur’ enterprises that turn off prospective buyers, they are equally unwilling to spend money acquiring a ‘one man band’ operation.
So, if you’re aware that you are totally immersed in day-to-day business management at present, one of the first things to do is delegate the running of your company to a trustworthy and dedicated management team.
Getting the help you need
With so much still to be decided about the UK’s future trading arrangements, a team of knowledgeable professionals (accountant, valuer or business transfer agent) will surely be worth their weight in gold.
You will need to listen to the advice offered by seasoned operators – who must have experience and a proven track record which is relevant to your own particular industry. The preparation, marketing and sales process which will underpin your exit strategy needs to be well-planned and carefully coordinated to achieve the best outcome.
And in a market where short-term turbulence and volatility cannot be entirely ruled out, the last thing your impending business sale needs is any nasty surprises which could have been avoided.
Obtaining a valuation
Your valuer will advise on the method(s) of valuation usually employed within your sector.
This is an important consideration because the information your valuation provides must not only present an appealing snapshot of the business but should also inform the expectations of your potential purchasers.
At this stage, any deviation from accepted practice will put you at a great disadvantage and may even result in no sales enquiries at all.
An honest and independent valuation of your business will provide you with useful negotiating tools, as well as a handy reference when you need to answer those inevitable questions from prospective buyers.
Finding a buyer
There can be many reasons why people would want to buy your business, so it pays to be aware of who may decide to make you an offer. Your interested party may be a ‘strategic buyer’ from within your own industry. Perhaps even a regional rival, this type of buyer will want to acquire your business because it will fit well within their existing business.
The specifics will depend on the context: for example, they may want a larger market share, need your expertise and/or your technology, or just want a new geographical area. And while your employees could do well out of the deal, future economies of scale may pose a risk of redundancies further down the line.
Corporate buyers who see your business purely as an investment could take a back seat and just let your business trade profitably. But they could also make wholesale changes purely as an investment strategy which could drastically alter the profile of your company.
Selling to an employee consortium will keep a lot of stakeholders happy (staff, customers, suppliers) – as well as yourself. So, in many ways, this is a win-win situation.
However, the deal may be a little slower to accomplish than a straight sale to a newcomer.
If you have decided 2019 is your year to exit the business, the clock is already ticking.
Adopt a positive, upbeat attitude towards the sale, and both you and your team will certainly need to keep a weather eye on market trends and political and economic developments, as well as the all-important mood within your own business sector.
Jo Thornley joined Dynamis in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.