The secret to a successful sale? A team that cares
Ballard Evans are corporate finance advisors, specialising in partner-led advice that helps owners of private companies secure the best deal when they’re ready to sell.
Here, Managing Partner Jon Ballard shares the key considerations for anyone thinking about a sale, including why you need an advisor who is not only experienced but who cares that you get the best and right outcome.
Selling an owner-managed business can appear deceptively simple. Essentially, a sale requires three key elements:
- A willing seller
- A willing buyer
- A deal that works
However, successfully selling an owner-managed business can be one of the most emotional, intensive, and detail-oriented processes a person can go through in their working life. Therefore, it demands having the right team in place.
That’s why we choose to work with Champion Accountants. Like us, the Champion team understands that selling a business isn’t just a transaction – it’s the culmination of someone’s life’s work. Their approach mirrors ours: putting the client’s best interests first.
Do you really need a corporate finance advisor?
When you sell a house, you appoint an estate agent to manage the process, find the right buyers, and secure the best deal.
But unlike a business, a house doesn’t comprise living, breathing things – it doesn’t employ people, serve customers, manage multiple sites, or have performance that goes up and down. This makes selling a business significantly more complex.
The selling process is usually an immense undertaking with many moving parts. Each phase in the process is heavily detailed, with potential roadblocks that can arise suddenly to put the sale’s momentum – or the sale itself – in jeopardy.
It can also prove a highly emotional experience. For many clients, a sale is tied to financial health in retirement and their family’s future wellbeing. Also, exiting the business they have spent their life building is often deeply tied to the owner’s identity, so emotions can run high.
Despite the complexity and the stakes, I still see some business owners attempt to manage the deal process by themselves – a path that will never achieve optimal results.
The bigger the decision, the more informed you need to be. That’s why you need a corporate finance advisor – someone on your team who knows what they’re doing, understands your reasons for wanting to sell, knows how to get the best deal and cares about what’s right for you.
What does a corporate finance advisor do?
Our first step is to check that a company is saleable and that the valuation the seller wants is achievable.
We create an information memorandum – a topline view of the company designed to give potential buyers enough information to appraise the business and, very importantly, to highlight future opportunities the business can provide.
Then we build a list of potential buyers. It is essential to ensure that everyone on the list is commercially sensible (they would be a good buyer of the business) and financially credible (they have the financial ability to acquire it). We’re careful about who we approach, as we only want to disclose information to serious buyers, under NDA constraints. We also work closely with the seller to understand if there’s anyone they do or don’t want on that list.
Once we have a shortlist of serious, qualified buyers, we present them to the client. We will then only speak to people our clients are happy for us to approach.
Our job isn’t to make the decision for our client – it’s to find as many credible potential buyers as possible, give the seller options, and share our assessment of each. But only the seller can know what’s right for them and for the future of the business they built.
In my experience, it’s about securing the legacy of the business and passing it on to someone they trust whilst getting the best deal possible.
What can Champion clients who are thinking about a sale do to prepare?
Put in the work now to make yourself redundant later, because the single biggest issue for almost all buyers is a high level of reliance on the owner.
A business with the ability to successfully operate without the owner will attract more potential buyers and will be worth more than one with an irreplaceable owner. For this reason, invest in your management team now. Teach them how to run the business.
If you’re a Champion client considering a sale, you already understand the value of working with advisors who genuinely care about your success. Apply that same principle when choosing your corporate finance advisors – look for partners who will invest the time to understand not just your business, but your personal goals for the sale.
The right advisory team, working together, can make the difference between a good deal and an exceptional one.
