Silverwing Business Exit Advisory Services
Business owners wanting to sell or exit their business for the first time are often unsure of how to best proceed and tend to rely on the advice of friends and the inexperienced which just leads to more questions:
- How much is my business worth?
- How can I maximise the cash I receive on exit?
- What are the different options for structuring a sale, and what documentation will I need to prepare?
- How do buyers think, and how can I best prepare my business for sale?
- What is the market doing and how can I turn this into an advantage for me?
These questions are just a few of the many questions that business owners may have when they are considering to sell their business.
Learning by doing is a hard, time-consuming, and very expensive way of selling your business and will likely cost you significantly in unrealised value and your ultimate selling price.
Now imagine being able to confidently manoeuvre through this process with an expert who knows where all the pitfalls are and is willing to guide you through the process. Instead of focusing on the process of selling your business, you can focus on doing what you do best: running your business better than ever before.
How you can you benefit from working with us?
Understand what your business is really worth and why:
Working with investors that acquire companies we have seen repeatedly the vast differences between how sellers and buyers value a business. The differences are often based on not just the overall value of a business but also relate to which areas of the business are seen as valuable. As a business owner you know the effort you have put into the different parts of your business, and it is easy to think of this as representing value. The buyer doesn’t focus on past efforts that got you to where you are today. They look at the current and projected earnings of the business, opportunities for additional upside and the scalability of the business. We help you enhance the value of the different components of your business and how to showcase them to potential investors.
Increase your valuation:
Once you understand what investors consider valuable, over time, you will be able to make your business more valuable. The more time you have to work with, the more you will be able to increase your valuation, but even last-minute tweaks can have a substantial positive effect on the valuation of your business for exit. In the short term your valuation can be increased by highlighting and showcasing the benefits that the buyer is after, so this takes centre stage in the discussions. Removing or limiting aspects of your business that could be of concern to a buyer is also a part of our process. Although these short-term fixes can bring in a nice boost in the sale price of your business there are limitations. Given more time we then can help you with more substantial changes that will improve your valuation even more.
Understand how a buyer thinks and negotiate with confidence:
Selling a business is not just about the numbers. Psychology plays a very important role in the process. As a first-time seller the landscape can be difficult to navigate, and one wrong decision can easily cost you the whole deal, or at best a substantial amount of money. Knowing where, when and how to apply pressure, when to give in, and when to ask for more are decisions we make on a daily basis. You can benefit from our experience in this area, which will allow you to negotiate with confidence and maximise the outcomes you achieve.
Preparing and streamlining the right documentation for buyers:
Removing friction from the sales process is sales 101, and it is just as important when selling a business. There are many ways friction can occur in a sales process, and one of the most obvious is missing or incomplete information and documentation that the buyer requires. For every week that goes by while you compile missing information a buyer has more time to find reasons not to proceed. An initial lack of complete documentation will also often prompt the buyer to ask for even more documentation to make sure there are no “skeletons in the closet”. We assist our clients in preparing all the necessary documentation ahead of time to ensure a truly frictionless process that presents your business in its best light.
Deciding the right timing and type of exit:
The value of a business is affected by timing. We always suggest that business owners begin to prepare for their exit well ahead of time. Remember: desperate sellers in a time crunch will always receive a lower price than they could have. You also need to consider externalities such as the general business climate for your particular industry and the economy as a whole. Internal timing issues may be related to the stage your business is in or the direction your market is taking. Personal concerns, such as retirement or generational changes or other personal concerns may also be important factors that dictate timing. We can work through these issues with you and help you make the decision of when is the best time to sell your business.
Finding the right type of buyer and structure to achieve your ultimate goals:
There are many different types of potential exits to consider including selling to a strategic buyer, private equity, handing the business over to a family member, selling to managers and/or existing employees, or selling to a competitor. You also need to consider whether you sell through a broker, do you offer seller finance, and what is the best structure to achieve your ultimate goals. Each of these options have their own advantages and disadvantages. We will help you assess which strategy best fits your situation, and help you prepare what is needed to make it happen.
Selling your business is a Unique Learning Opportunity that delivers real-world financial returns
Selling your business is more than just a transaction. It is the learning opportunity of a lifetime, or at least it can be when done correctly. Instead of getting bogged down in fixing problems and panicking over last-minute work that you weren’t aware you should have done, you could instead learn valuable lessons about how successful transactions are completed at the highest level.
We see this learning process as an important part of our service that adds immense value for clients. We make sure to structure the process in such a way that every step is clear to you, and we address the components of each step of the process in coaching sessions that allow you to capitalise on your new understanding.
With our support, you will better understand:
- Business valuations and how to increase your selling price
- Negotiation skills get the best deal possible
- Value uplift before you begin the selling process
- What documentation is necessary and how to use it to your advantage
- Advantages and disadvantages of different types of exits
- Right timing and how to prepare a business sale roadmap
- How to identify the right buyer
- What happens after you exit your business
Our Proven Seven Step Process
We have developed a proven seven step process that helps guide you from where your business is today, through improvements that help increase the value of your business, all the way to the closing of the deal. These are the steps that we have taken time and time again to successfully exit the business we have sold valued at more than US$ 50 million.
Our process creates structure from what can otherwise often be a chaotic situation of trial and error. We take you through our process and each step feeds into the next allowing you as the business owner to better understand how much time and resources will be needed for each of the steps.
The process includes the following seven steps:
Step 1: Understanding your motivation for selling and clarifying the ultimate outcome you wish to achieve
In order to best support you, we need to know what is the real motivation for you to sell your business and what you ultimately hope to achieve both personally and professionally. For many, going through a review session that clearly documents both your personal and business goals and what is important to you is an important exercise. We find these sessions often enable you to think about what you want in new and different ways and create powerful insights. This is where we discuss your plans with you, and get clarity of how best to proceed. We will discuss the reasons behind your exit, when you want to exit, and we will look into the different options that are relevant for you in your situation. We also look at what your personal goals are, to find alignment between your professional and personal goals. Other areas we explore include your expected sale price, your continued involvement or otherwise in the business post sale, timelines, the types of exit that may be beneficial to you and finally your musts vs hopes and your ultimate goals.
Step 2: Conducting a Business Diagnostic Assessment
The business diagnostic is a powerful tool that allows you to obtain a complete understanding of the current state of your business and its level of readiness to sell. Based on the conduct of this assessment, we help you identify the strengths and weaknesses of your business, obtain a preliminary assessment of how much your business may be worth and what needs to be done to increase your valuation. This allows you to understand where your business is at today and where it needs to be when it comes time to sell.
Step 3: Designing your Roadmap to the Sale
Once we conduct the diagnostic we need to work together to close the gap between where your business is now and where it needs to be. There is much to do when planning the sale of your business. It is easy to lose focus if you do not have a map to guide you. We work with you to prepare a roadmap that you and your team can use to guide you from beginning to the close of the sale of your business. The roadmap includes the selling strategy, the profile of the investor you will target, how you will communicate with them and what documentation will be required. This roadmap is a “living document” that is regularly updated and benefits any size company at any stage of the sale process. We will use this roadmap in our coaching sessions and you and your team will use it in between.
Step 4: Supporting the implementation of your roadmap
The sale of a business comes with many challenges, both from the buyer and a seller’s perspective. We coach you through the process of implementing your roadmap in a structured and efficient way. We help you determine what your business is worth in the market and support you as you implement the steps needed to make your business ready for sale. We will also identify areas of the business where we can make improvements to increase the valuation. Our support also includes guiding you in the preparation of what documentation is required and how to present it as well as identifying potential buyer profiles, how to make it known your business is for sale and communication strategies to effectively drive the process.
Step 5: Assisting you to identify the right buyer
Even when everything is in place, you still need to find a buyer. This is something we are able to assist you with. We have a large network of potential buyers and know how to find and communicate with different buyer profiles should they be outside of our network.
Step 6: Supporting the formal sale process including the conduct of due diligence
The formal sale process is often seen as the last sprint towards the closing of a sale. At this stage much needs to happen over a short period of time. Any delay increases the risk of a deal falling through. This is also the stage when lots of technical documents need to be shared and explained. Errors or inconsistencies in the documentation provided could easily cost you the deal at this point. Similarly, documents that have been formatted in ways that are unfamiliar to the readers bear the risk of putting a buyer off. We have significant experience in the preparation and review of these types of documents. We know how investors and buyers prefer their documents to be prepared, making it easy to perform due diligence. This helps increase the likelihood of a successful deal, as well as shortening the time needed to complete due diligence. We support you through from the beginning to the completion of the due diligence process.
Step 7: Helping you negotiate and closing the best deal possible
Seeing the deal from the buyer’s perspective and what drives their decision-making and value perspectives is key to getting the best price possible for your business. Our people have cumulatively hundreds of years of experience from both the buy and sell-side of hundreds of transactions. We understand what the buyer is thinking, and we see through their tactics for driving down prices. We know how to counter these tactics. After all, we know what it is like to be sitting in their seat as we have sat there so many times before.