| | It is vital that the sale of a business is planned well ahead of time in order to maximise the value of the business. Kleinhardt can assist business owners to plan their exit and too add value to the sale process. Statistics reveal the typical small business owner is aged 57 and 40% are planning to retire within five years. Over the next 10 years, it is estimated that more than 400,000 privately owned businesses will be on the market as the ageing ‘baby boomers’ seek to retire. Such figures point to an increasingly competitive market. This means to business sellers that they really do need to plan ahead and prepare their businesses for sale carefully, in order to maximise the business value in what will become, progressively more, a buyers market. The Key steps for business owners to effectively sell their businesses are: - Strategically decide what they want to happen
- Decide when
- Plan how
- Do it
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Some of the options that sellers have available to them are: - Existing partner buys them out
- Acquire a new business partner
- Hand on to a family member
- Recruit a manager
- Train up a staff members to manage the business
- Management buy-out
- Staff buyout
- Full sale to competitor/industry partner
- Full sale to another entity
- Close business and sell assets
- Close business and maintain income stream from assets
- Public float ASX or secondary boards
| | There are several reasons that prompt owners to sell their business. - Exit strategy This usually occurs when a business owner is considering retiring from the business, for either health or lifestyle reasons, and wants to plan their exit but protect the business and staff. There tends to be no immediate urgency with this type of sale. The owner will usually negotiate a fair price. There are several strategic options available in this instance. If the business is large enough a public float may be an option or a merger with a synergistic company or an outright sale. It is preferable if Kleinhardt can work with the owner to prepare the company for a sale. Companies are often run completely differently when they are managed to support the owners or run to be sold.
- Wealth accumulation This sale is prompted by the owner wanting to realize their investment in their company. This is not usually an urgent sale but one driven by price.
- Cash realization This type of sale is usually prompted by need for cash somewhere else. Usually urgent, this is a challenging sale as often the decision to sell has been prompted by the inability of the business to generate cash for the owner in the normal course of business.
- Cannot cope, burnout This is a sale where the owner has problems in continuing to run the business. This type of sale tends to have a level of urgency and emotion and price is not the ultimate goal.
| - Part sale When the owner decides to sell off part of the business. This could merely be a down-sizing strategy, but more likely it is when part of the organisation has problems or no longer fits with the strategic direction of the company. However, it could be attractive to another company if synergies can be found.
If you require assistance in the preparation of your business for sale, Kleinhardt Business Consultants have the knowledge, know how and expertise to make it happen most effectively. Contact Kleinhardt today for a confidential, no cost appointment. |
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