In this blog, we explore the preparation and look at early tactics to secure a sale which is a great outcome for the entrepreneur selling, the company and the buyer. 

In the Maritime World, before setting sail and leaving your safe harbour, you should always plot your course and know the weather environment you will encounter. In the world of M&A, the same principles apply, and you certainly want to have a pilot who can navigate the winds of change during every deal process – whether they are all encompassing storms or local squalls.

At Caldey, we have been helping entrepreneurs to navigate a successful course to a great deal for 30 years. We have seen force 9 storms in terms of the banking crisis, the dot.com bubble, 9/11 and many recessions and of course the Covid pandemic and times where it is simply impossible to forecast the swell, the tide, the weather or the wind; yet given all these circumstances, we have navigated our clients to successful deals.

In all of these circumstances, there are some fundamental questions to ask and carefully consider when preparing for the journey of selling your business:

• Exactly what does the business do and for who?
• Why does the market and the clients love the business?
• Has the business done as much as it can to “lock in clients”?
• Is there a clear plan for the future?
• Has the business the capacity to deliver this plan?
• Has the business the team to execute the plan?
• Is it a well-run organisation?
• Who should be interested in buying and why?
• Have we asked the two fundamental questions – why should those particular parties be interested and why should they pay a premium price? These two questions fundamentally underpin all M&A deals. If you have robust answers to these questions, then your Corporate Finance Advisor can clearly plot the course to a successful journey to value with you.

Before any business is marketed in any process, we also need to ensure that the market it operates in already sees the attributes that will attract those buyers and a premium price – for example, is the website and the marketing function selling the real underlying value of the business and what it delivers? Does the business have the “wow factor” in the market? If not, how in the short term can the perception of the business be enhanced? Or should a longer time frame be considered at this point pre-marketing? Even before the sale is explored, if the potential buyers can see a great business, then the discussions start on a higher plain. 

As we said at the beginning of this blog, time and preparation and some soul searching considering the external environment and your business before embarking on a process is time well spent. Your advisor should be helping you to explore the above elements and helping you to plot a course to a successful outcome.