You want to achieve the best value for your exit, but how do you ensure that you receive the amount you initially agree? How do professional businesses acquire a target? What Due Diligence (DD) is likely and what will they ask you for? All our virtual finance directors have experience of buying and selling businesses, typically managing the DD process, so are ideally placed to help make the deal happen.
When should you prepare your Business for Sale?
You have worked hard to build your business so you will want to be sure of achieving the best realistic price come the eventual exit. Through our experience on the Acquisition side we know that only too often business owners are let down by the lack of thorough preparation of their business. This is why we launched 2 Solutions which we recommend are carried out at least 3 years prior to exit.
vfdnet provides 2 highly effective Solutions:
1. Exit ReadiMap ® – “A picture is worth a thousand words” that’s why our Exit ReadiMap ® gives you a clear picture of your business readiness for Exit, clearly indicating areas for improvement, helping you to build your business value over the next 3 – 5 years. Key Benefits are:
- Identification of key strengths
- Feedback meeting highlighting key actions to drive up valuation
- Insight into choosing the best exit route
So significantly improving your odds of a successful business sale
2. Strategic Workshop – Bringing together all the key Shareholders this workshop brainstorms the future plans of the business, in the context of historical achievement, and provides an indication of the projected Valuation at Exit. This workshop provides:
- Indicative Value per Shareholder
- Identify key constraints
- A good feel for the key drivers of Business Value
Often these two Solutions are followed by providing an ongoing Virtual Finance Director service, helping the owner manager to turn the weaknesses into workable action plans.
vfdnet FDs have strong experience of doing deals having been involved in over 20 transactions involving SME businesses. see our Case Studies and Testimonials. Contact us for a no obligation, no fee introductory meeting.
Case Study: Business Sale
Service business Case Study
Two co-owners and Directors founded the business in 1999, and grew the business from its roots, to include both two new service lines. By March 2012 the Group had a turnover of £2.6m and making a good net Profit.
Following the initial workshop and Strategic Exit review, vfdnet worked as a part time Virtual Finance Director, including review and commentary on the monthly management accounts as well as managing the annual budget cycle. Once the management accounts could be relied on vfdnet assisted the Directors by introducing a senior manager bonus scheme and EMI share option scheme, addressing the short and medium-term incentives for the key managers. During this period vfdnet assisted the Directors in two acquisitions.
In 2015 one of the co-owners wished to exit the business, so vfdnet assisted with the negotiation and structuring of the Management Buyout, helping to complete this in April 2015, and so allowing the co-owner to emigrate.
The Group continued to grow, both the topline sales and bottom line profit, with the year 2016-17 recording Sales of £5.9m and a good Net Profit level. The acquiring co-founder then received an attractive offer for the business from a Private Equity backed Group. Vfdnet assisted in preparing the Group for the Due Diligence process, then project managed information requests from Grant Thornton, culminating in a clean bill of health. The owner of the business was very pleased that the initial valuation was indeed the deal which was completed in August 2017.
“We were delighted that James joined as our Virtual Finance Director in 2012, helping us to shape our strategy, achieve reliable management accounts, and being instrumental in the design and implementation of the incentive schemes for the senior managers. James’s assistance in acquisitions and especially the 2015 Management Buyout was great and really helped get the deals over the line. James experience was also hugely beneficial in preparing and facilitating the detailed Due Diligence by Grant Thornton, paving the way for the successful business sale in August 2017 which was very satisfying as it achieved my objectives.”
Stuart P – Director & former owner.
What do Buyers look for?
Companies which are seeking to grow by acquisition will be constantly looking at quite a number of ‘possible targets’ at any one time… Read More >>
Valuing Businesses – science or art?
There are many reasons why a business valuation may be needed, including buying a business, selling a business or even organising a Management Buy Out (MBO)… Read More >>
Top Deal Breakers to avoid
As Virtual or part time Finance Directors we are passionate to help make deals happen, which is why it is incredibly frustrating when deals fall down… Read More >>
“Our Virtual Finance Director and Virtual Financial Controller team brought a further tier of professionalism to our accounting processes. Our VFD and VFC helped considerably in working through the due diligence…” Read More >>
Sebastian – MD and business owner
“I am delighted to say that the Business Sale process ran smoothly and efficiently. Our Buyer actually complimented us on our DD readiness and the…” Read More >>
Christopher W – Chief Executive
“Our VFD’s assistance in acquisitions and especially the 2015 Management Buyout was great and really helped get the deals over the line. James experience was also hugely beneficial in preparing and facilitating the detailed Due Diligence by Grant Thornton, paving the way for the successful business sale in August 2017 which was very satisfying as it achieved my objectives.…” Read More >>
Stuart – former business owner