Selling your business successfully is proving to be more difficult than business leaders realize. The upside to sales requires careful preparation, but must also be accompanied by professionals that will allow you to optimize your sales and make your business as sustainable as it is the key issue. Dynamic invites you to visualize it through 6 essential steps.
Between 2015 and 2025, it is estimated that transfers should be related to approximately 630,000 companies (source report submitted to the Prime Minister on July 7, 2015). However, more than half of transfer-related companies close due to a lack of buyers… In fact, the key to transfers is anticipation (up to 5 years ago!) and the search for suitable buyer profiles. But the path to follow to pass your business successfully does not end there.
Step 1: Maintain company valuation and prepare sales
When a business manager wishes to sell his company, he must evaluate the company in a way that can be objectively justified by future assignees. This valuation is based on the company’s accounting data.
It is recommended to prepare future sales by trying to optimize the presentation of its accounts, but the legal organization of its activity and, if necessary, change operations, capital growth. , the sale of securities to obtain a consistent shareholder base. To present your company in the best possible conditions and allow for a fair appraisal.
Warning! Don’t confuse the value of your business with the value of your business!
– Value The result is tangible (machines, buildings, fixed assets, etc.) or intangible (patents, customer files, brands, software, etc.).
– price is linked to supply and demand.
Step 2: Negotiation between the assignee and the assignee
The transferor(s) and the potential buyer must negotiate the key points of sale (item, price, terms of payment, date of completion of the sales transaction, etc.).
If the parties reach an agreement in principle on these various points, it is advisable to call a professional, who will write a letter of intent summarizing the main lines of the proposed sales transaction, setting out the terms and an estimated timetable. .
Step 3: Audit
The transferee would then proceed with the legal, social, administrative and audit audit of the company that it intends to acquire.
It is recommended that he determine the experts he would like to intervene according to his area of ​​expertise (lawyers for the legal and social aspect, accountants for the accounting and tax areas).
The transferee should ensure, in particular, that the valuation for the company is maintained and the past management of the company does not give rise to any irregularities. It is advisable to specifically ask the business manager about his relationship with tax administration (check dates, possible adjustments, etc.), as well as pending or patent disputes.
This step is important and will allow the parties to establish the transparency necessary for the legality of transfer deeds. The drafting of the Liability Guarantee will be based on the results of this audit.
Step 4: Guarantee of assets and liabilities
For a transfer operation to be fully legal, the transferee must be required to provide an asset and liability guarantee agreement.
Such an agreement would allow the acquirer to limit the risks inherent in the company it is acquiring. Its purpose is to guarantee the accounting, legal and social elements that have made it possible to increase the value of the company during negotiations.
There are two ways to determine the value of your business:
The so-called patriarchal method aims at valuing a company’s assets (what it has) and subtracting the value of its debts to obtain net assets, also known as equity.
The so-called yield method, or profitability, aims to estimate a company’s ability to generate profits in the future and then subtract its value. This includes part of the risk of non-achievement of this objective.
5th Step: To whom to send your company?
– You may transfer your business to a member of your family, to a third party, or to one or more employee(s).
– Family transmission.
– You can pass on your family business by donation or sale. A notary will give you valuable advice so that the transfer goes smoothly, as he can assist you with the inheritance aspect (including the indifference of any heirs who are not buyers).
– Broadcast to a third party
– The choice of a third party is necessary to maintain the amount of activity, employment and transaction.
– Transmission to one or more employees
– This option has the advantage of transferring your business to associates, professionals who know the business, customers and suppliers well. The importance of preparing your business transfer upstream takes full meaning here: The sooner you do it, the more time you’ll give employees to build up their savings.
Finding a prospective buyer is an important and delicate stage of transmission because you have to manage communication with your employees, your suppliers and your customers who can be unsteady by this news.
Step Six: Deed of Sale
The move may be formalized by a protocol if there are conditions preceded by an act of sale or, failing that, by an act of direct sale.
This document involves providing all the details of the operation. Such an act would be particularly suited to the post-sale phase: non-compete of the seller for a period and within a specified range, the presence in the company or the presence of the company’s salespeople or “key men” for a specified period ensure the transition to do.
Source: service public.fr