Forward Thinking Business Blog –
PKF-FPM clients occasionally receive unsolicited offers to buy their businesses. There are a lot of reasons why this happens. Successful businesses attract attention, particularly where they have a strong online presence or get media coverage. If you receive an offer, before talking to the potential buyer, it is a good idea to have a chat with someone experienced in selling businesses as this will give you an insight into what your business could be worth. (PKF FPM has a dedicated team who can help you.) Remember that the buyer may be talking to other businesses, so if you are serious about selling, be careful about playing too hard to get.
In the start up phase of most businesses, owners put a lot of thought into planning — not least because having a robust business plan is essential if you want to raise finance. However, planning is equally important when you are preparing a business for sale and the earlier you start, the better your chances of getting the best price. Indeed, we at PKF-FPM suggest that even if you are never planning to sell your business, being ready for sale means your business is operating at a high performance level.
Profit is an obvious area to focus on. If you can show a potential buyer that you achieved consistent or growing profits over a number of years, that will help you get a better price. Similarly, having a good, consistent set of accounts for the previous few years is a definite advantage.
Building a strong team is another advantage as it means your business is more sustainable from a purchaser’s point of view.
If there are underlying problems in your business, these will be discovered when your potential purchaser carries out their due diligence. So, it makes sense to resolve these problems before embarking on the sales process. Ideally, for example, non-core business assets should be removed.