Tips for a successful transaction (for sellers)
When you are attempting to sell your assets (whether it's a business, shares / units or another interest in an entity, or something else), there are a lot of details to consider.
If you don't approach a transaction in the right way, then you increase the risk that the transaction you are hoping for will be delayed, or even fail.
Here are a few tips for sellers to consider:
- have the details of your assets (business assets, property (for example lease details) intellectual property (for example trademarks, business names and websites etc.)) organised and at hand so that you can provide them easily.
- be organised about any financial statements which you may be disclosing - have them ready, and make sure that they support what you say about the business.
- be completely accurate and reliable about information which you disclose to the buyer, and when answering their questions. If you're unsure about something, then don't give an 'off the cuff' answer which might be wrong - ask for time, get it right and give the correct answer. The buyer will check what you say, and if they discover that your information is unreliable, then this will create challenges and can lead to transaction failure.
- think about what third parties (e.g. financiers, any landlord, any franchisor and any other key stakeholders) will need to co-operate for a successful sale to be achieved. Be realistic about what they are, and aren't likely to do to assist you. Be realistic about their timeframes to act.
- ask for help, from people with genuine skill and experience, when you need it. Then, listen to their advice and act on it.
These simple tips, if followed, are likely to significantly improve your chances of a successful transaction.
In a future article, I will suggest some tips for buyers to consider.
Stephen is a commercial lawyer with extensive experience in advising businesses in areas of acquisitions and divestments, commercial agreements, structuring, legal risk and revenue issues. He also advises on property law, with a focus on commercial and industrial property. Follow @SJR_Nicholsons