A company's long-term continuity is one of the biggest challenges facing entrepreneurs and established business owners alike. Especially considering that 70% of companies don't make it to their fifth year, according to a study by Confecámaras, and that 60% of owner retirements end with the company closing, according to another by Confecomerç, even when the business is profitable. These are devastating figures that show how important it is to know how to sell a business.
Going through an M&A process is essential for two important reasons. First, to ensure the company's survival and continuity; and second, so that the founders and owners can recover part, all, or all plus a capital gain of their initial investment. Two compelling reasons that should encourage owners to pursue the sale of their business, but how do you sell a company?
1. How much is my business worth?
The main question has to do with the company's valuation: how much money to ask potential investors for in an M&A process. In this case, you need to take financial stock of the company by putting assets, liabilities, revenue, type of customers, business growth, profitability, potential… on paper. It's a whole series of questions that will help you get a better idea of what the company may be worth.
The thing is, valuation is sometimes subjective and can be influenced by personal factors. The most important thing is that it's a price backed by data so you can explain to potential investors why you've arrived at that figure. We invite you to get a first estimate with this confidential tool, which in two minutes will give you an estimate of what your business is worth.
2. How is the confidentiality of the sale guaranteed?
The issue of confidentiality is precisely one of the aspects that worries owners the most. In Spain, a sale is sometimes mistakenly perceived as a business failure, and therefore a personal one, so owners try to keep it secret. In other cases, this silence is sought so as not to give the competition an advantage.
Confidentiality is guaranteed “through appropriate NDA procedures and the right selection of potential buyers or counterparties,” notes the advisory firm One to One Corporate Finance.
3. What will happen to me after the sale?
Another concern for family business owners when they consider selling their business is what comes afterward. In other words, what will happen to the employees and to the owner after this M&A process.
In the case of a merger, it's increasingly common for the new owners to keep part of the management team for a while, including the owner if they have executive duties, to ensure a smooth transition.
4. What does the sale process look like?
If you've never intended to sell the business or you're unfamiliar with how the M&A process works, it's normal to have doubts about how to proceed. In this case, you can do it directly, looking for potential buyers from within the company and tapping into your contacts, but if that search doesn't pay off, there are platforms that connect SMEs and investors quickly and confidentially. At Deale, we have 3,000+ organizations and 2,600 investors looking for businesses like yours.
Therefore, delegating this process to professionals and platforms that know the legislation and valuation methods, and that have contacts… is a recommended option for those who want to sell their company.
5. How do I find a reliable buyer?
If you choose to go through a third party, at Deale we have digitized processes and artificial intelligence tools capable of filtering precisely and quickly not only among the companies registered on the platform itself, but even outside it, thanks to data parameters that flag potential corporate moves in specific industries.
6. What do I do with the company's assets?
Buyers are sometimes not interested in purchasing real estate assets. So you can negotiate the sale of the structure, the business, and productive assets – machinery – on one side, and the real estate on the other.
7. How much will it cost me?
If you work with an advisor, there's generally a fixed fee plus a success fee, which can range from 1% to 6% of the total deal value if it ultimately closes successfully. This depends on the size of the company and the route you choose. In the case of Deale, there are three plans: free, basic, and premium, which costs €900 per month and includes a profile, unlimited meetings, company promotion, an account manager, and a tailored valuation, among other services.
