Should I contemplate selling my business during the Coronavirus pandemic?

Hannah Douglas
Corporate Finance, COVID-19
Hannah Douglas, Lovewell Blake

While it may feel as though the world has come to a stand-still you may be thinking to yourself, what exactly can I be doing to ‘get the house in order’ before a potential sale?

Hannah Douglas, Lovewell Blake

In the last few months we have been forced to adapt to a new ‘normal’ in the ways that we go about our daily lives, from working at home and adapting to new technology, to socialising via video conferencing apps and most of all maintaining our social distance when out in public and shopping for those grocery essentials. It’s no wonder that with everything that has been going on, selling your business may have slipped to the bottom of that priority list.

If you are fortunate enough to be operating in an industry that has not been heavily affected by the Covid-19 pandemic then now could be a great time to start preparing for sale so that your business is in good shape for when the economy recovers.  In our experience it generally takes around 2 years to become ‘investment ready’ – you can never be too prepared so why not start now?!

While it may feel as though the world has come to a stand-still you may be thinking to yourself, what exactly can I be doing to ‘get the house in order’ before a potential sale?

  • An important part of the sales process is due diligence – a potential buyer will want to investigate the financial, operational and legal aspects of your business to ensure there are no hidden skeletons in the closet before committing to a sale. Despite the current climate, there are numerous things you can be doing to make the due diligence process as seamless as possible. From ensuring that your financial affairs are in order, to taking care of any property issues such as reviewing leases and their likely impact on the sale.
  • You may also want to think about whether you want to exit the business completely or whether you would be prepared to continue working in the business on a consultancy basis during a transitional period. Your decision will of course depend on your position, however having support from a dynamic management team to ensure the business is meeting its forthcoming objectives is also an important factor.
  • A potential acquirer will want to see evidence that there is growth and even more potential for further growth opportunities later down the line. Why not prepare some robust projections to illustrate this idea so that you are one step ahead when it comes to price negotiations. Given the current level of uncertainty, we recommend that you project a few different scenarios ensuring you are covering off the worst-case scenario.

We have a wealth of experience to be by your side through every stage of the transaction – from conducting research into potential buyers, to assisting you with due diligence and valuation analysis right through to negotiations and seeing the sale through to completion.     

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