Selling your business is a big decision. Oxford Edge is here to help you navigate this momentous occasion.
Trust the process
Preparing your business for sale involves several activities that need to be completed to ensure a successful outcome. Getting these steps right is key to ensuring that your business can be marketed in the best way possible and your business’ value can be highlighted to a potential purchaser. So, what exactly are those steps?
- Define your goals and potential exit strategies
- Determine business value – see our guide
- Enhance the value of your business prior to sale
- Prepare an information memorandum
- Review presented offers – usually NBIOs
- Negotiation
- Agree on price
- Purchaser due diligence
- Further negotiation
- Agreement
- Pop the Champagne
If you’re selling to an existing shareholder, the process is slightly different and driven by the shareholders’ agreement. Generally, there are pre-emptive rights entitling the shareholder first right of refusal to acquire the shares. The price is usually driven via a roulette clause within the shareholders’ agreement. A roulette clause is essentially a price at which both the vendor and purchaser would agree to sell and buy at. If a price cannot be agreed, an independent valuation is generally obtained to determine the fair market value.
If the remaining shareholder doesn’t choose to exercise the pre-emptive rights, the outgoing shareholder can offer the shares to the open market. If this occurs, the process will generally follow the above 11 steps.
If this all sounds like a bit of you, contact Oxford Edge today to get the ball rolling on selling your business.
