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March 2006

Selling your business

As the owner of a successful business you may have thought of selling it at some stage.

I'm speaking on the subject at a breakfast meeting at the Maltings in Ely this week. 

I intend to cover how you go about making the decision to sell and the process? How can you groom the business for disposal? Timing is key - what factors should influence it? Business valuations are quite artificial - what will drive the real value of the business in a sale?

If you are to sell how can you identify potential buyers? Should the business be auctioned or is a succession buyout a viable alternative? How do you obtain competitive tension? How to safely entice a buyer and manage the provision of sensitive information to potential buyers. And of course tax planning - maximising the net proceeds.

Join us for breakfast, find out if your business has 'selling' potential and take the opportunity to make some valuable business contacts.

To book contact Jo Morgan of Morgan Event Management on 01638 565880

Practical M&A advice - making an acquisition

To grow by acquisition get the early stages of the process right saving cost and anguish later. 

1.        Planning; Do you have a strategic intent that your acquisition will support?  If so you should know what type of business you seek.

2.        Get your own house in order; if you are not fully in control now, you surely won’t be during and following and acquisition. Are you management and systems up to it?  Make the necessary investments first.

3.        How much to pay?  What is your target worth?  Research on what others are paying for acquisitions in the sector will give a benchmark, but beyond that what you can pay will be a figure quite unique to your business, given any synergies that you have with the target

4.        Funding.  Some funding can be raised against the balance sheet of the target, but what can you contribute?  Could you raise venture capital?  Best of all will the vendor allow you to pay some of the consideration on a deferred or earn-out basis.

5.        The Pareto Effect.  People waste time on deals that don’t happen.  The trick is to make a quick assessment of a realistic fundable price, and strike an early deal with the Vendor.  Of course this is not always possible and some good deals take months to put together. 

Approach acquisitions with clarity of purpose, and to do some quality practical thinking about price, funding and negotiation.  Do it that way and it might even be fun!

This item originally appeared in Business Weekly M&A supplement in February 2006