Making the right exit
Exit focus cannot be underestimated. The first step for the seller is determining the type of business sale to proceed with.
Before the viable route to undertake is established, it is important to consider all options available. In order to help determine this, the business should be independently valued before entering into negotiations.
The resulting tax implications for each route should also be observed in ascertaining the optimum viable exit. Specialist accountancy advice should therefore be sought at the outset of exit considerations.
Once the exit route is decided, the seller needs to ensure that the target business is prepared for the due diligence enquiries from the buyer and is in a saleable state.
This due diligence process can be time consuming depending on the size of the target business and the number of issues identified and raised by the buyer.
Preparation is therefore key to help streamline the process as much as possible and mitigate the risks of the deal falling through.
Being proactive and contacting early will help streamline any exit
It is at this stage when preparing for an exit that the seller should consider any skeletons in the closet! Be open and honest with your advisors – after all they are there to help you achieve the best possible outcome.
If you are aware of any issues which could put the buyer off or potentially affect the value of a deal, raise this as early as possible to try to mitigate any risks.
As part of the seller’s preparation, consider if any consents are required from any third parties. Check if there any legal charges or financial institutes involved, or landlord consents required, which could delay the sale.
Being proactive and contacting them as early as possible will help streamline any exit and prevent any last-minute delays.
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