Maximising Value From The Sale of Your Business – New Rules Apply

Brian McCann, Partner and Director of MC Vanguard (Mitchell Charlesworth's Corporate Finance Division) outlines the new rules that apply when trying to maximise value from the sale of your business:

Any business owner who has been keeping half an eye on the possible sale of their business since the financial world imploded in 2007 knows that the rules have changed.

Deal volumes dived post 2007 and have recovered very slowly.  Whilst 2013 is expected to be a better year, deal volumes in the third quarter of 2012 were around 20% lower than for the same period in 2011.

The rules have changed because buyers are now much more risk averse.  We can see this because, whilst the number of companies with cash available has grown significantly, there has been no acceleration in deals.

Sale of Your Business

Confidence is in short supply and most management teams are prepared only to buy when they can see an obvious and almost immediate fit.

The new rules are:

  • Selling before the business is ready will always cost value;
  • Getting the business ready will take longer;
  • The returns from investing in preparation of the company for sale are higher than ever;
  • There is a premium on certainty of income, strong remaining management, unique selling points and clear branding;
  • For many companies, there will be no trade buyers and creative routes to exit will be required - these too will need to be planned.

These rules are here to stay for the foreseeable future so the New Year is the ideal time to take stock of your company's position - however long you expect to retain it.

To help our clients, MC Vanguard have developed an Exit Planning Diagnostic, which examines the business through the eyes of a potential buyer and provides both a current and a potential future valuation.

If you are considering selling your business, or would like further information about MC Vanguard's Corporate Finance services, please do not hesitate to contact Jean Hughes on tel: 0151 255 2300 or submit a quick enquiry form.

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