One of the first steps in preparing the sale of a company is the identification and elimination of potential stumbling blocks. There are several reasons why the sale of a company can fail, and to prevent this happening, these stumbling blocks must be identified, managed or eliminated where possible.
a) Initial questions
It is advisable to ask the following questions beforehand:
Why do we want to sell? What do we really want to sell? Who do we think may be interested in buying the company? What difficulties will we have to face during the sale? What do we hope to obtain? Are we willing to reduce our expectations?
b) Personal aspects
The first stumbling block to the sale can be yourself or the other shareholders. It is important that, before focusing on the decision to sell, you take into account the interests of minority shareholders, reach an agreement about the sale with them and get them involved in the process from the beginning. Their commitment can be a decisive factor in whether the sale finally takes place.
c) Characteristics of the company to be sold
Having dealt with these stumbling blocks, the next step is to address the various key aspects of the company. In order to face them the ideal approach is to take measures that solve each one of these aspects, such as regularizing contingencies, appoint prestigious auditors, avoid long-term commitments, have a professional team, have clear and documented business processes and so on.
d) Market position
It must be borne in mind that, despite having proceeded correctly, there are several reasons why a buyer may not be found. It may be discovered that there are no buyers for the company or that the buyers offer prices lower than the minimum sale price. In this case you must be prepared to withdraw the sale of the company from the market and continue with the business of creating value over a period of one or two years before trying to sell it again.
The sales process is complex and time-consuming. It is advisable to make anonymous approaches to buyers and investors before validating market interest and the viability of the project.
e) Alternatives to a sale
If it is finally found that the sale is not timely or possible, alternative plans will have to be initiated, which will also have to be planned, such as a merger, the search for a venture capital fund to help prepare the company for a subsequent sale, and business liquidation, sale of the company to employees, and so forth.
