The Sales Process
Every business, whether large or small, product or service based, will follow a similar Business Sale process. Axis can help guide you through all of these stages, helping you make the decisions which will lead to the most successful outcome.
Business Valuation
The first step in the whole process is to have an independent valuation of your business. This is also the time for you to find out more about Axis Partnership. This can be carried out as a face to face meeting and more often than not is held off-site for confidentiality reasons.
Creation of a sales memorandum
This identifies the benefits and features of your business. The presentation of this document, layout, approach and content is crucial in influencing purchasers at an early stage. An overview of the business, staff, market place, assets, financial position and future potential should all be included.
Identifying purchasers
Research into potential purchasers includes considering competition, suppliers or related businesses seeking expansion or synergy. Individual or institutional investors may also be considered. As professional business brokers, Axis will already know who is looking for your type of business, and we have a substantial live database and research facilities to hand.
Approaching prospective purchasers
It is important at all stages to ensure confidentiality. This is best achieved with initial discussions being non-specific and not detailing who or where the business is located. We make sure that a confidentiality undertaking document is signed by any potential purchaser.
Negotiation
Carefully approaching discussions with a clear appreciation of all objectives is essential. By using different negotiation tactics and sale structures, the best terms are secured. At Axis, our professional advisors can lead discussions and assist with advice throughout.
Agreement
Securing terms through written confirmation by an exchange of letters or ‘heads of terms’ ensures clarity and maintains confidentiality. This enables a purchaser to investigate the business in more detail. Exclusivity may need to be given to the purchaser at this stage.
Due Diligence
Once initial sale terms are agreed, a purchaser will check the strength of their proposed purchase.
This is called Due Diligence and involves the purchaser reviewing commercial aspects such as contracts, staff and key customers. Usually solicitors will look at legal aspects and accountants at financial considerations. Some matters may be too commercially sensitive to risk disclosure until negotiations are well advanced. Sale terms may need reviewing as a result of additional information obtained through Due Diligence.
Sales Contract
This is the final sale document. You and your Axis advisors will agree it after extensive discussions with the purchaser. There will usually have been compromises on both sides to obtain a final acceptable document. It can often be a complex, stressful and lengthy process to produce a contract but your Axis advisors will always be on hand to make the process as straightforward as possible.