A Business sale to Employees is a relatively new exit route for you as a Business Owner. Although on the surface the deal might appear to be similar to a Management Buyout, however in practice there are sizeable differences. For a start the order of the steps in the deal tends to be different (see a typical project process flow below), and also the energy which normally is devoted to negotiation is more productively channelled into setting up good governance for the future.
Our Virtual Finance Directors have good experience of Business sales into Employee Ownership, often starting with the Business valuation model. Our Business Valuation model also helps to identify the realistic payment period for the consideration, with payment periods ranging from 5 to 8 years. Where the Business Owner wishes to be paid more on Completion than is available in the business, bank funding needs to be sought, and we help clients draw up their narrative and financial business plans. We also recommend doing our Exit ReadiMap ® diagnostic review, which provides confirmation of strengths, but also reveals ‘blind spots’ which can be ironed out before the transaction. This in turn helps in preparing for the Due Diligence process, which is either required by the funders, or is good practice as part of the warranty and disclosure process.
Contact me for a copy of our white paper on Business sales into Employee Ownership.
“It was great having the experience of our Virtual Finance Director to facilitate and project manage our Buy Out. James introduced professional advisers, who worked well together as a team, helping us overcome the…” Read More >>
Stuart – MD and Owner
Vfdnet completes Print Company fundraising and helps negotiate Management Buy Out (MBO). Gareth D – Managing Director commented: “The addition of a part time Finance Director from vfdnet made for a cracking management team to negotiate and complete our MBO…and really helped make the deal happen” Read More >>
How could an up to date Business Plan help you?
If you don’t know where you are going how will you know when you have arrived? You may know that you need a Business Plan, or have an old plan that has not… Read More >>
Could your business benefit from an MBO
A Management Buy Out (MBO) is simply the acquisition of a business by its existing management team, usually backed by external funding sources and so… Read More >>