Prepare your business for a high value sale

Question:

Are people beating down your door to buy your company today?

Answer:

At The Alpha Group we make certain that you create an Action Plan to prepare and groom your business for a high value sale.

So, how does this happen?

Easy, its a six step-process using the power of the peer-to-peer advisory board.

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Firstly the peer-to-peer advisory board help you identify what is your strategic problem.

you sales and profits are increasing year on year. However, if they want to sell your business easily and for a high value, they may find this difficult. Why? There are there common reasons why potential buyers may not want to purchase a business. These are:

1 The business “health check” on a company reveals some serious weaknesses and problems.

2 The Business Plan fails to inspire you, they don't see the performance and the potential growth of the business.

3 At the critical, due diligence stage of the sale, the company lacks the key documents required by potential buyers. This causes endless delays and frustration for the potential buyers.

We work with you to give you an Action Plan to tackle each one of these three critical factors.

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Secondly the peer-to-peer advisory board help you assess how prepared your business is currently for sale and plan the key actions.

Using the business “health check” below, you rate your current business in the following areas using the scale of 1-8 (8 being the business is highly prepared for a successful sale & 1 being low):

1 Your HR

2 Your Marketing

3 Your Sales

4 Your Sales Team

5 Your Profit

6 Your Financing

7 Your Purchasing

8 Your IT

From these scores, you identify three specific areas of the business and the key improvement actions that they will implement before they consider a sale. The peer-to-peer advisory board help you decide the actions, by whom and the deadline:

HEALTH CHECK: YOUR KEY ACTIONS

Business area:

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Your key actions:

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By whom?

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By when at the latest?

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Thirdly the peer-to-peer advisory board help you complete your comprehensive Business Plan.

Your Business Plan needs to inspire both you and your potential buyers and give you confidence about your company, its performance and the future growth of your business.

you use the Business Plan Template to assess how comprehensive your current Business Plan is and what they need to do to make your Business Plan complete.

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The Executive Summary

• Your Company and business description

• Current position and future outlook

• Management and ownership

• Goals and company strategy

• Funding requirement and usage

• Financial summary

1 The Business and its Management

• History and position to date

• Company purpose

• Your Company goals – short and long term

• Your Management Team

• Capital structure

• Professional advisors

2 Products and/or Services

• Principal features and applications of your products or services

• The readiness of the market for your new products and services

• Development cost estimates

• Your product patents, trademarks, licensing, copyrights, guarantees and warranties

• Your future potential and product development

3 Markets and Competition

• Market overview and size

• Market segments, growth potential and target markets

• Your customer profiles and target markets

• Geographical market focus

4 Marketing Strategies and Selling

• Your marketing strategies

• Your selling method(s)

• Your Sales & Marketing Team

5 Management and Staffing

• Recruitment and selection

• Roles of existing and planned staff

• Your organisational structure

• Your strategies for retaining and motivating staff

• Rewards for staff and the relationship to the required business performance and growth

6 Operational Plans

• Your technical and engineering plans

• Premises, facilities, equipment and machinery needed

• Quality assurance plans

7 Financial Projections

• Your sales forecasts

• Profit and loss projections

• Balance sheet

• Your cash flow forecast

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Your business plan: your key actions

Which sections and individual parts of the above business plan template do you need to complete in order to have a comprehensive, written Business Plan?

Which 6 key parts of the Business Plan do you want finished and implemented within 6 months?

Working in strict confidence, which member of your team (including yourself) will be responsible for each of these 6 key parts of your Business Plan?

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Fourthly the peer-to-peer advisory board help you file your key documents for due diligence.

The following key documents are critical for you to have available for the due diligence stage of selling your business. It’s wise for you to start now in gathering, creating and filling these documents in preparation for your sale.

1 Corporate matters

1.1. Your up-to-date Memorandum and Articles of Associations

1.2. The names and address of all registered shareholders with your shareholdings

2 Accounts

2.1. Your audited accounts for the last 3 years

2.2. Your management accounts for the past year

3 Finance

3.1. A list of bank accounts, including the name and address of your bank branches

3.2. Your overdraft and loan facility letters of agreement

3.3. Debentures, mortgages, charges and other security documents

4 Trading

4.1. A list of major customers (i.e. those accounting for more than 5% of your sales turnover) and the value of sales to you in each of the last three financial years

4.2. A list of major suppliers (i.e. those accounting for more than 5% of goods or services supplied) and value of purchases from you in each of the last three financial years

4.3. Joint venture and partnership agreements

5. Competition and trade regulation

5.1. The rules or codes of conduct of those trade associations of which your Company is a member and by which it is bound

5.2. Your undertakings and assurances given to regulatory authorities under antitrust or restrictive trade practices

6 Employment

6.1. The service agreements for each of your directors

6.2. Standard terms of employment for all grades of your employees

6.3. Documents relating to any of your:

• commission or bonus schemes

• profit sharing schemes

• share option schemes

7 Assets

7.1. For all of your company vehicles, the registration number, month and year of acquisition and whether owned or leased

7.2. A list of major items of capital equipment

8 Intellectual property

8.1. A list of all your registered (patentable inventions, designs, trade names and logos) owned by your Company and used by it

8.2. Licences of intellectual property and know-how by your Company to third parties

8.3. List of domain names used by your Company and registration documents relating to these domain names

9 Computer system

9.1. A list of software licensed to your Company and copies of any licences which are significant or unusual

9.2. Other IT contracts relevant to your Company including:

• Maintenance contracts

• Out-sourcing contracts

• Remote hosting contracts

• Hardware leasing contracts

• Disaster recovery contracts

• Source code escrow contracts

10 Property

10.1. A list of all land and buildings owned, occupied or shared by your Company and the purposes these are used for

10.2. In respect of any leasehold property, a copy of the leases and details of the current rents

Documents: your key actions

Which of the above documents do you currently not have filed?

Of these, which six will you collect and/or generate over the next 6 months?

Working in strictest confidence, which members of your team (including yourself) will be responsible for collecting and creating these documents?

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Lastly the peer-to-peer advisory board help you take your next immediate actions.

The profound impact on you and your company of preparing your business for a high value sale is that you will significantly increase both your sales value and the ease of selling your business.