I spoke to Nick Davies at Steele Raymond and asked him "If you had to describe a dream scenario in terms of what a client came to you with, what would it be?"
his answer? Prepare your data room TODAY!
Even if you arent planning to sell your business in the short term, setting up a data room now could save you hours of both legal expense & time spent in due diligence.
Set up a dropbox/cloudserver/notion database and start dropping everything that your business requires to function in there into seperate folders. For example: A HR folder with up to date staff contracts, handbooks, letters of resignations, any performance plan details, any accidents that might have happened to them. HR is often a main focus for a buyer so getting all of this information up to date and in one place means that DD can hit the ground running. CHECK that your employment contracts are up to date, as this will inevitably save time later down the line.
Get your Statutory register together
This is often overlooked by sellers. The Stat records record things like directors details, PSC (persons of significant control) as well as register of charges and register of members. Collate these documents (often stored with your accountant) into a folder so the buyers can be confident of what they are buying!
Prepare your business to reduce contingencies at exit
Getting your business to a self sufficient point where isn't dependent on any one person is a key part of preparation for the corporate transaction process. By ensuring you have tight systems and processes, your business will be more operationally efficient. When it comes to selling this means that the buyer will have more confidence in what they are purchasing, likely reducing on an 'earn out' clause from the buyer, meaning you get more money on day ond and reduce the retention period. This further reduces legal expenses as there is less negotiation on this element of the SPA.
Update Asset/IP/Contract registers
If you're in an industry like Plant hire for example where you will likely have a heavy Asset register, bringing this up to date with HP information, asset numbers, NBV, depreciation figures etc will be a project well worth spending time on.
NEXT STEPS:
If you are thinking of selling your business, even if this is currently a pipe dream for you, give us a call today or drop a message to info@theexitadvisor.co.uk for a confidential conversation about how it might look.