There are no perfect businesses

When it comes to selling businesses, we work with them for as long as we can to achieve several things:

1. We want the presentation of the business to be clear, concise and accurate.
2. We want the sale of the business to achieve the best price possible.
3. We want the sale to go through, and stay through.
4. We want the seller to get all his or her money.

So when we work with the business, it is first to make sure that everything required for the sale is in the right place, and in the righ format.

Secondly we make some suggestions as to how a higher price can be achieved

1. Sometimes this is as simple as getting the presentation right.
2. Sometimes it involves making some meaningful changes to the business to make it more valuable. This needs to be considered in the light of effort required to achieve what increase in value.

Simply put: There are no perfect businesses. It is the wont of the business owner – the seller – to show the business in its most positive light. It is the buyer’s duty, in the due diligence, to establish that these positive elements are true, and not exaggerated or worse – lies.

It is also certain in the due diligence, that the buyer will uncover some negative elements. This is unavoidable because there are no perfect businesses. A good buyer will understand this, and will not go screaming for the hills, unnecessarily. Instead he will take a view of what he has uncovered, and act in a rational way.

Poor buyers run for the hills, cancel the sale or make unreasonable demands on the seller.

Some buyers enter into a transaction knowing full well that there are no perfect businesses. They do this with the intention of driving down the purchase price on the back of the agreement of sale covenants. Competent intermediaries have seen this before and know how to mitigate any downside.

We do this by preparing the business for sale in advance of going to market. We help the seller to recognise inherent weaknesses in his business, and address those weaknesses in good time.

There are no perfect businesses. But we can get quite close!