Getting your business ready for sale: Increase value and reduce risk
Successfully a sell company It all starts with careful preparation. By preparing your company for sale well in advance, you increase its value, reduce risks, and build trust with potential buyers. Not only your financials play a role, but also the portability, legal structure, and positioning of your company.
At Match Plan, we've been supporting managing directors of small and family businesses for over 30 years in preparing their businesses for sale. Our structured approach, personal commitment, and experience in hundreds of projects form the foundation for a successful sale under the right conditions.
Why is preparing for a business acquisition important?
1. Optimize value and minimize risks
Good preparation makes your business more attractive and limits risks. Address issues like dependency or unclear figures in a timely manner, so buyers don't raise objections.
2. Personal and business motives determine the course
Your sales choice is often personal or strategic, such as retirement, a new career move, health reasons, or changing market conditions. Clarity about your motives helps you choose the right time and strategy.
3. Accelerate sales process and strengthen negotiating position
Being well-prepared exudes confidence. Complete documentation and insight into the figures ensure a smoother sale and a stronger negotiating position.
4. Set realistic expectations about price and timing
Good preparation provides clarity about the sales price and the right time to start. This prevents disappointment and keeps you in control.
What is the value of your company?
1. Definition and Importance of Business Valuation
A valuation Provides an objective picture of your company's economic value. It forms the basis for realistic price projections and highlights areas for improvement.
2. Most commonly used valuation methods for sales
The valuation methods used depend on the sector, financial structure and growth. The most commonly used are Discounted Cash Flow (DCF) and Adjusted Present Value (APV). In addition, the improved profitability method can also be used, but this is only done in specific situations.
Discounted Cash Flow (DCF): The DCF method calculates value based on expected free cash flows, discounted to their present value. Suitable for companies with clear growth forecasts.
Adjusted Present Value (APV): This method builds on the DCF, but explicitly adds the tax benefits of debt financing. Ideal for complex financing structures.
Improved profitability method: Focuses on structural profit capacity, with attention to both historical and future results. Primarily used for stable, highly predictable companies.
3. Why a Pre-Sales Appraisal is Important
An early assessment provides direction, prevents unrealistic expectations and helps determine timing and strategy.
When and why financial optimization is necessary
Financial optimization is an essential step in preparing your business for sale. It strengthens your negotiating position and creates more certainty for potential buyers. Improving your financial situation is essential in the following situations:
Varying or low EBITDA results
: Irregular or low results raise questions from buyers and can lower valuations. By improving your margins and optimizing cost structures, you boost profitability.
Dependence on a few large customers
: Revenue that relies heavily on a limited number of customers poses a risk. By diversifying your customers and establishing long-term contracts, you increase the stability of your business.
Incomplete or inconsistent annual figures
: Distrust arises from incomplete or inconsistent financial reporting. Ensure transparent, complete, and consistent figures over multiple years, supported by auditor's reports.
Insufficient insight into working capital and cash flows
: A clear overview of cash flow and working capital management provides insight into your financial position and reduces risks for buyers.
Complex or inefficient financial structure
: An opaque financing structure can deter buyers. Simplify and restructure where possible to create clarity and trust.
Legal structure and transferability
A clear legal structure and a well-transferable company are crucial for preventing delays and maximizing the value of your business. Both aspects give buyers confidence in the continuity of the business and make the sale smoother. Our team provides legal advice when preparing your company for sale.
Ensure clear ownership relations
: Check that shareholder agreements are up to date and that there are no legacy rights or obligations that could complicate a sale. This prevents legal complications during the sales process.
Separation of non-essential assets
: Organize real estate, intellectual property, and other non-operational components into separate entities or ensure they are legally classified correctly. This makes the corporate structure clear and more attractive to buyers.
Clearly map out related parties
: Intertwined loans, contracts, and other obligations within the group can pose risks. Transparency and documenting these relationships prevents uncertainty and pressure on value.
Strengthen the management team and business continuity
: An independent and professional management team inspires confidence in buyers. Ensure key figures are clearly identified and formally established within the organization.
Document processes and business knowledge
: Document crucial processes, customer information, and working methods in manuals, systems, or procedures. This makes the company scalable and less dependent on people.
Promote independence within the organization
: Encourage decisions and customer relationships to extend beyond your control. Delegate responsibilities, empower employees, and consolidate tasks within departments. This strengthens the organization's stability and reduces risks for buyers.
Documentation and risk management
Well-organized documentation is essential for a smooth sales process. It prevents delays, builds buyer confidence, and helps identify and mitigate risks early on.
Complete and accessible data room accelerates due diligence
: A clear digital environment prevents ad-hoc information requests and gives buyers direct access to all relevant documents, which significantly speeds up the process.
Early risk assessment prevents surprises
: A sales scan helps you identify legal, fiscal, and operational risks. This allows you to resolve bottlenecks before they arise during the due diligence investigation lead to delay or depreciation.
Strengthening trust through transparency
: A structured file with financial reports, contracts and legal documents demonstrates professionalism and a willingness to make an open transfer.
Mitigating dependencies and vulnerabilities
: Identify and address structural risks such as dependence on major customers, suppliers, or key employees by securing contracts and diversifying.
Securing crucial information for portability
: Ensure that knowledge and important documents are centrally and digitally available, so that the continuity of your business is guaranteed even after the transfer.
How presentation and positioning make the difference
The way you present your company partly determines the success of the sale. A sharp sales pitch and professional information memorandum Strengthen your position. The main benefits are:
A convincing sales story
: Describe what makes your company attractive: growth potential, customer relationships, or market position. This generates interest and guides the sales process.
Sharp positioning based on distinctive features
: Showcase what makes your company unique compared to competitors. Think of specialization, technology, or niche focus.
A professional information memorandum
: A well-constructed information memorandum provides buyers with insight and confidence. It combines hard figures with a clear company profile and vision for the future.
Why early involvement of advisors is crucial in sales
The right guidance makes the difference between a successful and optimal sales result. By engaging an experienced team of advisors early on, you avoid surprises, strengthen your negotiating position, and maximize your return on the transaction. The key benefits are:
M&A advisor and Registered Valuator from the start
: An M&A advisor guides you through the entire process: from valuation and positioning to negotiations and closing at the notary. Registered Valuator provides an objective assessment that is realistic and substantiated.
Maximum returns through strategic guidance
: With a smart sales strategy, professional information memorandum, and competition among buyers, we typically achieve higher bids and better terms than entrepreneurs can achieve independently.
Access to the right buyer
: Match Plan has a large network of strategic buyers, investors, and successors. This way, you connect with parties that are a real fit for your business and are willing to pay for it.
Preparing figures, structure and contracts for sale
: A legally and financially knowledgeable team ensures everything is in order before the process begins. This prevents last-minute risks and allows you to maintain control during due diligence.
Efficient, structured and without surprises
: With guidance, you avoid delays, legal pitfalls, and tax setbacks. You maintain an overview and can continue to focus on your daily business operations.
Why choose Match Plan?
Don't start the sales process until your foundation is in place. A well-prepared company exudes professionalism, prevents value pressure, and puts you in control of the entire process. This way, you maximize your proceeds and avoid unnecessary delays. At Match Plan, we understand the ins and outs of preparing and selling a business. We support managing directors in small and family businesses with personal and professional commitment and a keen eye for results. We assist you with:
- Mapping the value, risks and areas for improvement within your company.
- Structuring your company financially, legally and organizationally.
- Drafting a professional information memorandum and setting up the data room.
- Guiding the entire sales process and negotiating with potential buyers.
With over 30 years of experience and hundreds of successful sales processes, Match Plan is your partner for a carefully prepared and valuable business transfer. Contact us today for a free, no-obligation consultation about how we can successfully prepare your business for sale.
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