selling a company is one of the most stressful things you can do
TRANSCRIPT
SELLING A COMPANY IS ONE OF THE MOST STRESSFUL THINGS YOU CAN DO.SO WHY MAKE IT MORE DIFFICULT?
Developed by clinical psychiatrists, the Holmes and
Rahe stress scale attempts to define and quantify life’s
most stressful events. Among the top 25 causes for stress you
will find ‘business readjustment’, ‘retirement’, ‘change in financial state’,
change in line of work’, ‘change in responsibilities at work’ and ‘change
in working hours and conditions’. Interestingly, all these factors are
commonly associated with a business sale, and experienced by
company owners as they look to sell… sometimes all at the
same time!
Selling your business is an emotional, as well as commercial,
decision. Many business owners have never sold a business
before, and have to focus on a whole new, challenging and
technical process, while retaining overall responsibility for company,
its staff, and its operations. When dealing with buyers, there are
the added complications of requests for information, the demands
of due-diligence, and the intricacies of deal structure and
price negotiation.
It sounds off-putting, if the potential rewards weren’t so great.
So what can you do to minimise the stress of selling your business?
Here are four key issues every seller has to face:
∞ It’s an emotional process. The average BCMS client has been
involved in their business for 19.7 years. 79% of our clients actually
founded the company they are looking to sell. The business is much
more than an asset – and most business owners quite reasonably
want to find the best home for a company they have built from
nothing, and staff they may consider friends.
∞ You have a business to run. While we do see shareholders who
are not involved in the day-to-day running of the business, it is very
rare that our client has no other responsibilities to maintain during
the sale process.
∞ It can take time. Especially if you want to maximise the value of
the sale, there are no short cuts. A process that can take a year to 18
months and beyond can feel like a long and arduous journey.
∞ It’s intensive. One client recently commented on his due diligence
experience as “enormously intense” as 16 full-time lawyers picked
through every detail. An extreme example, but not an
uncommon sentiment.
www.bcms.co.uk
So what can you do to minimise the stress of selling
your business?
The very simple answer is to get some good advice. BCMS has gone
on record to state that ours is a process you can attempt yourself.
But just because you can, doesn’t mean you should. Even if you
don’t use BCMS, you will need the help and support of some very
good advisors.
Deal-making is stressful, with multiple angles to consider...
Legal due diligence, financial planning and tax advice are the obvious
areas where you will need support. Lawyers and accountants,
however, can sometimes be as good at creating stress as removing
it. A third party, a professional M&A advisor that has time, experience
and resources, will inevitably be a valuable asset. The key is this:
continue to run your business exactly if you were staying for another
10 years. Don’t start winding it down.
But how much of your time will it consume? Here is one BCMS
client’s view:
“There were certain things that were reasonably time
consuming, such as working on the sale documentation with
your team. However our time away from the business was
minor. BCMS prepared us for this. There were no issues around
this or anything that seriously took us away from our day-to-
day work.”
Inverclyde Biologicals
The ability to keep driving the business on a day-to-day basis is not
only a massive reliever of stress, but will help add to and, crucially,
maintain the value of the deal.
Whether this is the first time you have sold a business or you have
been through it before, you will appreciate the value of experience.
BCMS has completed over 500 deals in the past decade alone, and
our deal teams speak to thousands of decision makers across the
world every week.
The results are worth it. A successful sale has allowed many of our
clients to pursue new opportunities – whatever they may be:
“Because we had earned a significant amount of money
through the sale, there was quite a lot to do with organising
the sale proceeds. I’m writing a lot of software, which is what
I enjoy, and I’m trying to combine that with getting into yoga
a bit more!”
Compass Computer Consultants
“The buyer’s approach was that they don’t buy companies,
they buy management teams. They liked what we were doing
and wanted us to keep doing what we were doing, but to help
equip us to achieve the goals we wanted much more quickly.
We liked all that and in the end, it was a very
attractive proposition.”
Prior Diesel
“I’ve bought some property which I plan to renovate as a
holiday let. There are some investments that I’d like to make
to continue getting some income in and I’ve spoken to some
advisors about the best way to manage the sale proceeds.”
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Selling your business is stressful. You can’t change that, but you can
make it easier on yourself by getting the right advice.
To attend a free morning seminar, contact us on
To request a FREE Business Evaluation Consultation call us
on 01635 296193.
www.bcms.co.uk