10/06/2011

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What is Smith and Williamson Corporate Finance?

Brian Livingston, Director, Corporate Finance, Smith and Williamson:

Smith and Williamson Corporate Finance provides advice for entrepreneurs and owner-managed businesses on buying a business, selling a business and raising finance for a business. For many entrepreneurs these transactions will be one of the most important things they ever do and one of the most stressful things they ever do. Our role is to assist that entrepreneur in making that process as painless as possible.

How do you minimize the stress of selling a business?

One of the key ways to minimize that stress is through preparation prior to sale. There will be a number of areas that need to be dealt with and the more that can be dealt with prior to sale, the easier the process will be. Examples that I often give are litigation or accounting policy but the cleaner and simpler that your business is, the easier it will be to sell.

How do you maximize the value of the business being sold?

One of the key areas is to ensure that you can get the buyer to focus on strategic value. If you are unaware of what your strategic value is then it's very difficult to articulate to a buyer what the strategic value is. So I would suggest that very early on, you decide those areas of your business that you think have great value and those areas of your business that perhaps detract from value. If you can deal will the issues that detract, or remove them or change them whatever they may be then you will find again that you increase the process and you make the process simpler and you make it quicker.

How do you avoid failure during sale?

Prior to any sale, ensure that you have the team in place maybe one, two or three years ahead that can ensure that the business continues to deliver and you continue from a position of strength where you are talking about how good the business is rather than during the process you begin to under-perform. That means having good staffing, good relations, it means having supplier contracts tied up. The more you can do in advance of any sale, the easier it will be when your time for selling comes.

What is your top tip for selling?

Timing is critical. So many people have ideas of their own in terms of timing that I'm going to sell in five years, seven years or ten years. Remember, and this is difficult for the entrepreneur, it's not just about you, it's about the buyer as well. So when you're ready to sell, he may not be ready to buy. So therefore what I would suggest is that you should always monitor the world outside, keep an eye on the competitors, talk to them from time to time and understand what their aims and aspirations are. That way, when the timing's right, you'll know it. But at the same time, when the timing's right, if you've done your preparation that we discussed earlier the it should be a much cleaner, quicker and simpler process.

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