The Beer Mergers Bite – Size Business Blog 2024
As in previous years, this is a series of easily – digestible notes working through a variety of business related topics.
In the most recent series of blogs, we’ve looked at wider aspects of business life. In the next series we’re going to focus on all aspects of the business sale process. Our latest Blog looks at early planning.
Grooming – or ensuring your business is ready for sale, is a deeper part of early planning, focusing on specific aspects of importance to buyers. Operational and practical grooming allows the business to be shown as a sound investment. There are many and varied aspects but set out below are five key ones to consider.
Firstly – Consider key strategic issues. Focus on the real “drivers” of the business and what makes it tick, and what ensures sustainability of revenue and profit. Review profit margins and costings on all products / services to ensure that they are providing the maximum income stream for the company.
Secondly – Management. Ensure a second tier of management and other support staff exists to provide continuity post sale. Check all contracts with key staff are in place.
Thirdly – Review your customer base. Ensure there is no over reliance on a few big customers, if there is, seek to reduce that by broadening the customer base. Review all customer contracts and check they are current.
Fourthly – Operating Costs. Review all overheads, removing or reducing excessive or unnecessary discretionary costs of all types. Review and remove excess personal / family cost.
Finally – Systems. Review operational systems and financial controls to ensure these are up to the job, and that all company statutory records are all up to date and in order.
It can be seen from some of the points above that grooming is not a one-off matter, but a continual process, best started as early as possible. It can continue even through the sale process, where preparing for the type of offer, structure and terms and full understanding of the buyer’s perspective will contribute to maximizing the value on sale.
