Tips for Tuning Company Sales
by Jochen Mulfinger Selling your own company doesn't happen overnight. With simple measures, a successful sale can be achieved faster and at a better price. Those who want to sell their own company have not only defined a goal but also set the stage for a thorough assessment of the current status quo. Seeking Optimization Potentials The first step towards a successful company sale is to search for optimization potentials. In the context of a so-called due diligence examination, the chances and risks, as well as the strengths and weaknesses of the company, are analyzed. The examination result directly affects the pricing valuation of the company and defines the necessary measures leading up to the sale. Jochen Mulfinger, Managing Director of the Heilbronn-based business consultancy MWB Wirtschaftsberatung, says: "These measures can be categorized into accounting, (tax) legal, and internal company tasks." Improving Financial Ratios One of the accounting measures prior to a company sale is to improve all relevant financial ratios – preferably over several years. This enhances the company's credit rating. The entrepreneur should also ensure that the company's capital serviceability is in place and that the buyer does not encounter any backlog in investments. It is also important to have appraisals of machinery and real estate to uncover hidden reserves. Additionally, a flexible financing structure should be maintained so that the buyer has the opportunity to redeem "old" debt. Cultivate Contacts and Transparency The company owner should inform their financiers as early as possible about their intention to sell. Maintaining close contact with customers and suppliers is crucial, as potential buyers often emerge from these relationships. In the context of company transactions, professionalism and high transparency are key – as nobody likes to buy a pig in a poke. For a company seller, a company exposé is a neutral and ideal medium for the comprehensive presentation of the sales object. For potential buyers, it becomes an ideal basis for deciding on the continuation of the project. Optimally Prepared Mulfinger's conclusion: “Those who do their homework prepare their company optimally and transparently for the market and generally sell it not only faster but also at a better price.”
