If you no longer wish to own your company, you essentially have two options – liquidation or sale.
There is no doubt that selling is the more advantageous option. What will help, however, is an outline of how to proceed when selling your company.
How to Sell a Company in 4 Steps
If you have made the final decision to sell your company, don’t delay further action. Postponing only reduces the value of your business and your chances of achieving a profitable sale. So how should you proceed?
1. Prepare Carefully
Summarize what and why you are selling, and what you want to achieve through the sale. Clearly define what the new owner will gain by acquiring your company. Prepare the company itself for the sale as well:
- Define the organizational structure, decision-making processes, and internal guidelines.
- Eliminate critical issues and carry out a light restructuring.
- Shift from intuitive management to process-based management.
All these steps will make the sale easier and increase your company’s value.
2. Involve Top Management
Inform senior management of your intention and secure their support. This allows you to delegate the tasks from the previous step and the preparation of materials. Motivate key managers to achieve the best possible sale outcome, and ideally commit them contractually to remain in the company after the change of ownership – at least for a certain period.
Be careful about leaks of information. If news of the planned sale reaches the public, it may reduce the value of your company.
3. Set a Reasonable Price
Determining the right price can be tricky. One indicator is past financial performance, but that is not the only factor. For buyers, the company’s future prospects are often more important. If your business has been performing adequately but operates in a declining industry, achieving a high price will be difficult.
Another key factor is the presence of a professional and experienced management team. As mentioned above, if the people who contributed to the company’s success remain in place, you instantly gain extra value in the eyes of a buyer.
4. Pay Close Attention to the Sale Process
During negotiations, clearly define the transfer of ownership rights, relationships, and competencies. Ensure that the contract documentation includes all essential terms of the transaction. Also set out the security for payment of the purchase price.
At this stage, it is highly advisable to seek the support of a legal office to avoid costly mistakes.
Hire an External Advisor – It Makes Things Easier
An independent advisor is not emotionally invested, unlike you. They are a professional with extensive experience in selling companies. How can they help?
- They assess your business from the perspective of a potential buyer and value it accordingly.
- They advise on preparing the company for sale.
- They identify suitable potential buyers, or may even purchase the company themselves.
- They lead the entire sales process, from initial negotiations to final document signing.
Whether it is an s.r.o. or a joint-stock company, the process is more or less the same. What matters is thorough planning and preparation – ideally with the help of professionals with extensive experience. Entrust the sale of your company to us and leave the worries behind.
