COVID has caused a massive disruption in business sales. Most people are sitting and waiting for the results of what the coronavirus will have on their business. Businesses that have not been affected by the virus are still selling but just at slower rates. Businesses impaired by the virus people have been taken off the market.
You have been building to sell the business that you’ve put a lot of time, effort, and equity into growing, and now you’re looking to sell. Your objective is to get maximum value when selling and you’re assessing steps to prepare for the sale. You are trying to get the maximum price for selling your business, getting the best terms finding the right buyer or looking for the best broker to sell your business.
1. Determine what your business is worth
A business is generally worth a multiple of its profit. Depending on the size of the deal that can be 2-10 times profit. Smaller deals generally average 2-3 times profit (deals under UGX30m in price) medium deals 3-5 (deals UGX30m to 200m) and large deals 5-10 times profit (UGX200m and over)
2. Prepare your financials with your accountant
Because a business is valued on its profit then good financials are required. Preparing an adjusted profit and loss statement is required to present to buyers.
3. Find a broker
Depending on the size of your deal and whether you have an unsolicited offer on the table, most companies will garner a higher valuation when sold using a broker.
4. Develop the executive summary of your business
This is the document that outlines what the business is, financials and frequently asked questions to help the buyer make an offer.
5. Put your business on the market
Market your business to buyers looking to acquire a company.
6. Get offers from potential buyers
Receive offers from buyers and negotiate the best one.
7. Let the buyer perform due diligence
Buyers generally get 60-120 days to verify the financials and validate they are getting what they are paying for.
8. Close the deal
Time to celebrate! Sign the final contracts and the handover process starts.
