Selling a Company, Part 1: Initial Steps

If you have made the definitive decision to sell your company (or a part of it) and have established your expectations, there are several steps you need to take before the actual sale to ensure its execution and success. Every company has its specifics, but below we outline general steps.

Preparation of the Company for Sale

Before the actual sale, it is essential to internally organize the company to ensure it is ready for sale and attractive to potential buyers. This can be achieved by preparing all key documents, such as accounting records, tax returns, and documents related to the internal functioning of the company (e.g., internal regulations). It is advisable to thoroughly prepare for the due diligence process from potential buyers – more about this here: “Due Diligence”.

Your position can also be strengthened by documents related to business management, contractual partners, etc. Furthermore, to make the company attractive to potential buyers, it is necessary to ensure that the competencies and powers of the company’s bodies and employees are properly defined and balanced so that the operation of the company is not disrupted by the sale. At this stage, the assistance of the company’s management can be very beneficial, as they typically have a good overview of the organizational structure and can help you identify and address any gaps.

What Will Attract Buyers?

You need to consider what your company can offer potential buyers. Specify what makes your company unique compared to others in the industry, and how these advantages can be leveraged to stand out to buyers in the market.

At the same time, consider your weaknesses that could pose a problem during the sale. This particularly includes potential lawsuits, risky receivables, poorly maintained accounting, or tax issues. If you are unable to identify these weaknesses yourself and address their resolution, seek assistance from an external expert in the relevant area.

Determining the Price

One of the most challenging steps before initiating the actual sale of the company is estimating its monetary value. The final price depends on many factors, including the company’s assets, financial results, technical background, personnel composition, unique knowledge, etc. You may consult an independent valuation specialist who will provide an objective estimate of the company’s value based on all available information. We are also happy to assist you in determining the value of your company.

You can find the continuation of the sales process in Part 2: Finding a Buyer.