How to sell a business
How do you go about selling your business? What steps are involved, and how long does the sale process take? We will take you through all the important milestones. On average, selling your business takes around 6 to 12 months.
Exploration
The first steps towards selling your business involve clarifying what exactly you want to achieve - for both your business and yourself - and exploring the current market opportunities. We are happy to be your sparring partner at this stage: you have more options than you might think!
Additionally, this phase addresses the subject of the value of your business and what you can do to increase that value.
What are your aspirations for the future, both for yourself and the business? When do you want to sell, and what is the current state of the business? These are questions we discuss in an initial meeting. Establishing a personal connection with our deal team is essential, as selling your business can be an emotional journey. Our advisors provide impartial support in this respect as well.
Business value plays a crucial role in any business sale, for both the buyer and the seller. For an initial indication of the value, fill in the Marktlink Multiple. Within one minute, you will have a reliable and up-to-date estimate based on more than 1,000 deals and 40,000 calculations annually.
Our advisers will prepare a more detailed valuation, and identify ways to optimise the value of your business. At this stage, you may find that addressing certain aspects of your business first could yield a higher return later.
Your reasons for selling largely shape your exit strategy. Are you aiming for growth or looking to step back? Once we understand your personal motivations and ambitions, we will present various options. While many entrepreneurs have an idea of their preferred sale strategy, there may be options that have not crossed your mind but align even better with your unique situation.
Once you know what you are aiming for, it is time to identify the right buyers. One of Marktlink’s strongest assets comes into play here: using our extensive international network and data-driven approach, we bring together supply and demand in the M&A market on a daily basis.
Our advisors will market your business effectively, allowing you to explore multiple options.
To present the business well, we carefully prepare an information memorandum. This document details all aspects of the company and sector, including corporate structure, business activities, staffing, the owner's role, financial overview, future outlook, and risk analyses. This document is shared under confidentiality, to inform and engage potential buyers and investors.
You probably thought of several potential buyers for your company yourself. We supplement this list with the candidates we have selected based on our data-driven methodology. Once we have all possible buyers listed, we make a careful selection, based on the ideal search profile and the expected offers. After this screening, it is time to make choices and decide: who are we actually going to approach? Thanks to our large international network, we bring an average of 6 to 10 candidates to the table.
Once a company has shown serious interest, following a call and after reviewing an anonymised teaser, prospective buyers sign a non-disclosure or confidentiality agreement. This legal document obligates both sides to handle information with care and discretion. Importantly, the agreement also requires information deletion, should the deal not proceed. After signing, the candidate learns the identity of your business, and we provide the information memorandum.
Interested buyers will want to learn all about your business, and you will want to know more about them. During management meetings, often held on neutral ground, you have the opportunity to get to know each other.
Several candidates may submit initial offers, and with one of them, you will enter into a preliminary agreement, which is followed by an intensive phase of due diligence and negotiation. Marktlink’s seasoned negotiators will guide you through every step.
In our experience, you can usually count on multiple offers. The highest offer is not automatically the best; other conditions and mutual trust weigh just as heavily. We assist you in keeping a bird’s eye view, while you are getting closer and closer to the deal of a lifetime. After considering all aspects, we proceed with the process with one single candidate.
We record the preliminary agreements reached during the management meetings in a Letter of Intent. This includes the acquisition price, due diligence arrangements, management agreements, exclusivity for further negotiations, financing arrangement clauses and suspensive conditions. This legal document is the starting point in further negotiations. There is no 100% guarantee but in most cases, signing a letter of intent leads to a successful transaction.
The buyer will conduct due diligence to ensure the acquisition meets expectations. In this review, a lawyer or accountant examines all terms and information for accuracy and completeness. This phase can be challenging as you want to maintain the trust you built and move toward completion, but you may also still have many questions to answer. Our advisors help facilitate a smooth due diligence process, and will make sure that arrangements with respect to unforeseen price adjustments are addressed in the Letter of Intent.
It is almost official, the sale is in its final stages. Patience is key: legal counsels are drawing up all necessary documents, and a date is set to make the transaction a fact. Now is the time to decide when to inform various stakeholders.
With all contracts reviewed and signed, the sale process is legally complete. Together with the potential buyer, you have agreed on the official transfer and how to publicly announce the transaction. You transfer the shares in exchange for the purchase price, thus concluding an intensive period.
After months of strict confidentiality, now is the time to inform your employees, business partners and other stakeholders. You have probably made arrangements with the buyer to send out a press release. Marktlink collaborates with a professional agency that drafts and distributes these to relevant media. We offer this service free of charge as part of the process.
You have popped the champagne, you have finally handed over your business. You will likely be involved for some time to wrap up your tasks and hand them over to the new management. But most importantly, it is time to enjoy your new freedom and make new plans.
Are you planning to sell your business and do you want to know more about the sales process? Then feel free to contact us, our specialists are here for you.