What 6 objectives should be maximised in the sale of a company?

The business sale process has never been an easy decision for several reasons. This type of transaction requires certain experience that can hardly be obtained without having gone through one or more buying and selling processes before. In addition, there is the emotional component where the entrepreneur or owner of the company feels closely linked to it for different reasons. For example, it may be the case that it is a family business with which there is more than just an economic link. Behind every business is the effort, dedication and time of an entrepreneur.

If an entrepreneur decides to sell the business he has worked so hard to develop, it is because he has thought about it very carefully. In other words, he believes in the value of his business and is confident that he will be able to sell his business. company at the highest price.

In order for an entrepreneur to achieve his primary goal, it is essential that other secondary goals are met. As a general rule, the ultimate goal that motivates an entrepreneur to sell his business is an economic one: to obtain the maximum sales price.

The following are the objectives to be maximised for a successful business sales process:

1. Maximising valuation. 

2. Creating the best transaction structure. 

In the sale of a company, apart from the price, there are other variables in any transaction that are of great importance. For example, price payment terms, variable price calculation mechanisms, etc. Working out the structure of the transaction in detail can have a positive influence on the seller's risk-taking.

3. Minimising the responsibility or personal risk faced by the owner. 

In the sale of a business, the general philosophy is that pre-sale risks should be covered by the seller and post-sale risks by the buyer. In the contract of sale, the seller must negotiate to limit these risks and liabilities.

4. Reducing the cost of taxation and withholding when selling a company. 

In any company sale transaction, there is always a tax impact for the seller. This is why it is advisable to prepare the transaction properly in order to reduce this impact within the law. The buyer usually requires a retention of part of the price to cover potential contingencies. To the extent that the process is properly carried out, it is important to Due Diligence and risk mitigation, these guarantees may be reduced.

5. Structuring the ideal workplace and the non-commitment . 

To reduce the risks of ownership change in the sale of a company, the buyer usually requires a transition period and a non-competition covenant from the current management team and the entrepreneur.

6. Enabling the appropriate integration. 

The process of buying and selling a company is a process where the generation of trust is vital. Therefore, the seller must show a collaborative attitude with the buyer both before and after the closing. It is common for part of the price to be variable and subject to the short-term performance of the company. This model helps to bind the seller to facilitate the transition. 

If these objectives are maximised, a business owner can rest assured that the business he has seen grow as a result of his hard work will be sold at the price it deserves.