Selling a company is an important step in the life of a manager. Whether the reason is retirement, a new professional project or a desire to sell the business, this operation must be prepared methodically to guarantee its success.
So how do you go about selling your business? What are the essential questions to ask beforehand? What are the pitfalls to avoid? 🤔
Why is selling a business an important step?
Selling your business means passing on all or part of what you’ve built. This decision has an impact on your assets, taxes, operations and people. It requires time, anticipation and in-depth reflection on the sale project, the objectives pursued, and the most appropriate terms and conditions.
Preparing for the sale of your business: the essential steps
Complete diagnosis
Before taking any action, it’s essential to carry out a diagnosis of your structure: its financial, legal, social, organizational and commercial situation. This step enables you to assess your company’s strengths and weaknesses, identify areas for improvement, and enhance its value.
Estimate the company’s value
The valuation of your company is based on several methods: asset approach, EBITDA multiple, sector comparison, discounted cash flow, etc. It is advisable to call on the services of an independent expert to assess the company’s value in relation to its performance and potential. The sale price should not be overestimated, as this could slow down buyers.
Choosing the right disposal method
Businesses, company shares, sale of securities, sale of assets… Each type of sale has different tax, legal and asset implications. The choice depends on the personal circumstances of the seller, the profile of the buyer, and the legal structure of the company.
Best practices for a successful sale
Anticipate and plan
A successful sale needs to be prepared 12 to 36 months in advance. This helps to secure the transaction, improve financial indicators, structure the organization, and enhance the company’s value in the best possible conditions.
Professional support
Lawyers, chartered accountants, business transfer consultants, valuation specialists… These players can help you build a structured transfer process, formalize the business plan for the company to be transferred, negotiate and draft the transfer deed.
Identifying the right buyer
Finding a buyer who is reliable, competent and in line with your values is key. Whether it’s an employee, an industrial player, a fund or an individual entrepreneur, alignment of vision and financing capacity are essential.
Questions to ask when selling a business
- When is the right time to sell your business?
- What do I need to pass on to the buyer?
- What is a realistic transfer value for my business?
- How to secure negotiations?
- How will capital gains be taxed?
- What to do after the sale: gradual handover? support? new project?
Mistakes to avoid
- Launching without preparation.
- Underestimating the human impact of business transfers.
- Overvaluing the company.
- Neglecting tax and legal aspects.
- Wanting to close too quickly without a serious assessment of the buyer.
After the sale: what next for the seller?
Signing the deed of sale is not the end of the story. A transition period is often necessary to facilitate the integration of the new owner. Some sellers stay on as advisors, while others gradually withdraw.
So it’s important to think in advance about what you want to do after the sale: reinvest, pass on, create, travel…
Conclusion: successfully selling your business means anticipating, structuring and passing on the business.
Selling a business is not something you can improvise. It’s an important step, requiring hindsight, expertise and appropriate support. Well-prepared, it makes the most of the fruits of an entrepreneurial life, secures the sale, and opens a new page for both the seller and the company.
At JTNH, we support managers in the preparation, structuring and implementation of their divestment project, in complete confidentiality, with proven expertise in the industrial sector.
