Success factors for the sale of a company

Succession planning: Success factors for the sale of a company

There are few business tasks that are as complex as your succession planning. For the sale of your business to be successful, numerous factors need to be taken into account.

The decision to sell your business is not one that is made overnight. Indeed, there are few business tasks that are as complex as your succession planning. What are the most important factors in ensuring success?

Make your decision and dare to let go: many business owners feel uncomfortable with the thought of handing over their life's work to someone else, given how much of their life and soul they have invested into it. Clarifying your personal goals can help to eliminate any anxieties and uncertainties. Make the decision to sell when you are well-prepared and pursue the goals you have formulated in a consistent manner. You will only sell your company once and then only when you really want to. Half-hearted actions damage your company, are costly, time-consuming and stressful and, in some circumstances, reduce the value of your company.

Avoid time pressure: succession planning is a time-consuming exercise. The search for a suitable buyer is particularly difficult to plan. Also, sufficient time needs to be planned for sound preparation and a thorough induction of the successor. Time pressure impairs your negotiating position and has a negative affect on the whole sale.

Make a realistic assessment of the value of your company: it has been shown that most attempted sales fail due to the excessive price expectations of the seller. Requesting a professional company valuation from a neutral third party is the recommended course of action. Try to look at your company through the eyes of a potential buyer. This most certainly does not mean diminishing the importance of what you have achieved, but you do need to realistically assess the current situation and the future potential of the business.

Approach the selling process in a structured manner: a structured and professionally managed selling process is the key to success. Specifically, a market needs to be created in which supply and demand are brought together. During the selling process, take care to remain as committed as before in the way you run your business. It is essential to maintain confidentiality and discretion in order to avoid uncertainty within the workforce or on the part of suppliers and customers. This can usually only be guaranteed by an external consultant. It is generally recommended not to inform anyone about a sale until the transaction has actually been concluded.

Negotiate purposefully and establish commitment: a structured marketing process creates the foundation for fruitful negotiations. Make the most important elements, such as handover date, purchase price and payment terms, binding as early as possible, thereby avoiding wasting time on potential purchasers with whom you already disagree about key aspects. When concluding the transaction, a solid, sound contract that regulates the agreed parameters is indispensable.

Due to the complexity of a company sale, there is often a narrow margin between success and failure. Any lack of experience can be compensated for by engaging a consultant with the necessary expertise and a comprehensive buyer network. There is no prefabricated standard procedure for a company sale. The best way to approach it needs to be determined with the help of an individual marketing concept that takes into account the specific characteristics of your company. An experienced consultant is in a position to identify the owner's needs and to provide them with professional and objective advice throughout the whole process. When it comes to selling a company, it can be said that experiments are always more expensive than good advice.

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