11 Tips for Successfully Selling Your Business

1. Who will be the successor?

Perhaps one of the toughest questions in selling a business: who is the ideal buyer? Are you considering family members, current management, a strategic buyer, or Private Equity? Your own role is also important here. Will you choose a full or partial sale, and how long will you remain active within the company? Answering these questions brings clarity and peace of mind, though it’s not always easy. Based on our expertise, we guide you in early exploration of potential buyers or successors, along with the associated opportunities and risks. We call this ‘the power of the plan.’

2. Preparing for the sale

Starting to prepare your business for sale five years before the intended transfer date might sound extreme, but it’s definitely not. It’s important to have a clear picture well in advance of your life after the sale. Consider, possibly together with a wealth planner, what you need to live comfortably and to what extent the current value of your company meets that. This way, you gain better insight into how long you need to keep running the business to reach your goals.

3. The emotional aspect

Selling your business—perhaps your life’s work—often involves emotions. After all, it’s the company you’ve built over many years. Besides the right price, ‘a good feeling’ is an important factor in finding the best buyer. Considering continuity: who will take over all your tasks? What will happen to the company culture? In this regard, it’s wise to have an external advisor who keeps calm and filters emotions to help set the right next steps.

4. Surrounded by the right people

One of the most essential parts of preparation is the team you surround yourself with. Gather the right people around you, from business advisors to a trusted sounding board. Besides the acquisition advisor, think of a legal advisor and possibly an external confidant—someone who knows you well. This could be family or a supervisory board.

5. Determining the right value

Every entrepreneur naturally wants to sell their business at the best possible price. A solid business valuation is crucial for this. Such a valuation is not just a numerical exercise but a broad analysis of your company, set against the market and its developments. Which factors influence the company’s value? What is its unique selling point? What have other acquisitions paid? By conducting the right analysis and preparing accordingly, the chance of achieving a good selling price greatly increases.

6. Market dynamics

Suppose a potential buyer shows interest in your company. Is this the only party, or are there multiple interested parties? Comparing different buyers (foreign parties, Private Equity, and strategic buyers) provides insight into the different conditions these parties impose. This helps you make the right decisions. Moreover, having multiple interested buyers often motivates each party to offer better terms.

7. Good information

It is important to have your information in order. A professional M&A advisor will assist you in gathering the necessary information and compiling it into a clear information memorandum. This document highlights the strengths of the company and includes information about activities, key customers and suppliers, the organization, and growth opportunities. Of course, it also contains a financial section: the balance sheet, the profit and loss statement, and a forecast of expected revenue and profit. A strong information memorandum significantly increases the chances of a successful sale.

8. More than just the price

Of course, the price a buyer is willing to pay is an important factor when selling your business. Still, it may be wise to also think early on about other important terms. How will you leave the company behind? Will the property be sold as well or rented to the buyer? What are the consequences for the employees, and to what extent is continuity guaranteed? When it comes to the payment of the purchase price, multiple structures are often possible; the full amount may be paid at once or a portion may depend on the company’s performance over the coming years.

9. Smart Exit?

Not every entrepreneur wants to sell their company outright. It may be attractive to first sell part of the shares. In that case, Smart Exit by Rembrandt M&A could be an interesting option – a unique transaction model in which you secure part of your business equity, while continuing to run the company. The business is partially sold to a group of investors without the entrepreneur giving up control. After a period of, for example, five years, you can then choose to proceed with a full sale.

10. Management Buy-Out (MBO)

In a management buy-out, one or more members of the current management team take over the company’s shares from the current owner. A major advantage is that the sales process is often significantly shorter, with a relatively high chance of success. The established reputation and company culture are also likely to remain intact. To avoid a disrupted working relationship in case the deal falls through, it is wise to have an external yet involved advisor guide the process.

11. International opportunities

We are seeing growing interest from foreign buyers looking to expand into the Netherlands. An M&A advisor with an international network – and the ability to quickly identify and approach potential buyers – can significantly increase your chances of a successful sale. When pursuing an international sale, cultural differences can play a major role. Make sure to dedicate enough time and attention to this aspect.

The next move is yours!

Preparation, strategy, execution. Buying or selling a business is a multifaceted and often complex process that requires a comprehensive approach. Every move counts in the acquisition, merger, or sale of a company. We understand the dynamics of the market, the potential pitfalls of the process, and the questions that arise for you as an entrepreneur. In addition to these 11 tips, our team of expert advisors is happy to sit down with you to discuss your future plans.

E-mail Wilbert