One – Business Summary
The preparation of a business summary is the crucial first stepping stone on your path to achieving a business deal fast.
It will eliminate a lot of wasted time as prospective buyers will have a much better understanding of what they are getting into.
It is a document that ranges in length from about 10 to 20 pages, and will answer most – if not all – of the burning questions a buyer might have.
You will issue this document to those seriously interested only after they have signed a non-disclosure agreement (NDA). Issue it to anyone prior to this and you risk jeopardising sales opportunities.
To further reduce wasted time, employ the services of a professional broker who will produce the document for a reasonable fee.
http://vexus.co.uk is a reputable consultancy and a recommendable choice, though there are many options out there.
It is often difficult to assess your own business unbiasedly, as it is an extension of yourself in many ways – this is another reason to hire someone else to do it, aside from saving time.
An adequately experienced broker will also help you construct a marketing strategy for your business, along with assisting in various other areas, such as the reviewing of documents and highlighting points of concern.
The business summary is the groundwork on which your entire deal will be built.
Get this first step out of the way – or ideally have someone else do it, while you move onto another step – and your on your way to selling your business fast.
Two – Proactive Marketing
Following the preparation of your business summary, you will have a picture in your mind of the ideal candidate you are trying to entice.
Now it is time to be proactive and seek them out, whilst simultaneously reeling them in.
If your ideal candidate requires industry specific knowledge in order to run your business, target buyers through trade specific publications and websites.
If not, just spread the word like wildfire.
Have a third party – in maintenance of anonymity – seek out your ideal buyer and contact them over the phone or by any other means. Assemble a list of potential buyers and get to work fast.
Put up several advertisements on various business-for-sale websites. A good place to start is https://uk.businessesforsale.com, but again, the options are vast.
If your business requires industry specific knowledge and experience, focus on sites tailored to that sector. Just google ‘business for sale sites’ adding the name of your industry on the end.
Don’t focus on advertising in print media as it is generally expensive and ineffective. I wouldn’t go so far as to call it obsolete – yet – but it terms of value for money, there are far greater options available.
This is a good time to mention expense, because if you really do want to sell up fast, spreading the word to your maximum capability can be costly.
Some of the aforementioned websites charge a hefty subscription fee, and total costs for adverts can commonly exceed £1000 a month.
But we don’t plan to hang around for months, do we?
Three – Screening and Liaison
Being in a hurry can often cause negligence with regards to screening. If you don’t screen buyers properly, it will quite possibly extend the process beyond your time constraints.
The best way to ensure buyers are screened effectively and consistently is to create a template with which you can respond to enquiries promptly – as the majority of enquiries are going to come through email.
Those who are serious are going to ask questions and will require more information. Include the basic outlining facts in your template, but don’t offer too much information prior to the prospective buyer signing an NDA.
Bring the buyer to the point of signing the non-disclosure agreement.
Within your response template you should attach a copy of your advert as a reminder of what is being discussed.
Keep it short and sweet, mentioning the fact that you have a business summary ready to be received by the interested party once the NDA is signed.
This step will weed out the time wasters, as only those seriously interested will sign this document.
Your NDA should be relatively short and simple. Don’t request that people sign several documents and fill out huge forms, as this will not only be irritating for them and time consuming for you – it is also unreasonable due to them not yet having extensive information.
You are drawing them in at this point, not boring them to death.
The two vital pieces of information you are trying to gather through your NDA, are:
What is your net worth?
How much liquid cash do you have available?
If all is satisfactory at this point, email them your business summary and get in touch with a friendly phone call to let them know you are available for any queries.
Because we are trying to move quickly, it is tempting to follow up with further calls.
This is unnecessary as serious buyers will surely follow up with you on their own accord.
If the buyer is asking for a lot of information through email or over the phone, arrange a meeting.
If the buyer refuses a meeting for whatever reason, don’t waste any further time on them.
Your prospective buyer might say that they require a little more information before they are happy to meet, in this situation, provide them the information they need but only in return for additional details about themselves, such as a credit report or financial statement.
This will allow you to maintain a level playing field, while also allowing you to scrutinise them further.
A buyer should make an offer by the second or third meeting, if not, they could be wasting your time. Gauge their level of commitment during these meetings, and use your own judgment.
Four – Due Diligence
By now you should have reached some mutual agreements, and if you haven’t, ask them to make an offer.
You don’t really need a solicitor at this point, as you are just solidifying an arrangement between yourself and the buyer – focus on agreeing on key terms, and have the offer drafted after.
You need to have fully considered their financial position at this stage. It is a waste of time to negotiate prior to having a level of certainty about their ability to pay up.
If you accept an offer, it is now time for due diligence.
You each have the right to inspect one another’s financial position and respective background. If either party is dissatisfied, they can walk away.
Many deals collapse during due diligence, so ensure adequate preparation has been followed on your part. There is more information available on preparation and due diligence, which you can find in our extensive How to sell a business guide.
Due diligence will be relatively fast and unstressful as long as you have been completely transparent with your buyer.
You can further ensure transparency by offering to finance the sale, which will also allow you some leverage and control.
Any business consultant worth his salt will identify any misrepresentations or areas of concern regarding you and your business.
Don’t allow the desire to sell your business quickly cause you to hide potential deal breaking issues.
It will be uncovered and you will have to start all over again.
Five – Closing the deal
To maintain momentum and keep all parties organised, stick to a timeline produced by yourself – I know you’re in a rush but be reasonable in this regard.
Placing too much pressure on the buyer could convey desperation, which will only cause them to assume that there is something amiss.
Ensure checklists and timelines are followed by producing them yourself, well in advance.
The ins and outs of the process will be difficult to foresee precisely, so the checklists and timelines are subject to change, but they will bring a structure to the affair as well as facilitating a fast departure.
You will require professional assistance if this is your first time closing a deal. This will increase both speed, and the overall likelihood of achieving a good outcome.
It is not always a straight forward transaction, but if all the prior steps have been followed, and you are adequately prepared, it will be.
If you need to sell your business quickly, then contact us here.