Preparing for sale
The process involved in preparation for sales is a demanding process. This involves analyzing various factors. The steps involved in the process of sale are described as follows:
Selecting the Seller’s Team: The seller should form a team of professional and managers who will work with him throughout the process. The team should include:
- An accountant for assistance on the financial side of the transaction
- An attorney who is experienced with transactions of this type, wheter a privately held, publicly held, or non-profit organization
- A tax attorney
- Key members of the company’s management team who understand the business aspects of the transaction. These personnel should be based on previously determined strategic business goals for the selling process.
- The seller might be investigate business brokers who can assist him in finding a buyer
Understanding the Market Dynamics: Before selling a company, it is important to study the market to understand the current trend. This will help the seller to understand what kind of offers to expect from the prospective buyers and the values he could realize on selling his business.
Determining the Valuation Range of a Company: This is a very important step in the selling of a company. Valuation techniques can be from highly analytical and academic the more common company comparable valuation methods.
Pre-Marketing Value Enhancement: In this, the advisor of the company study the financial and strategic conditions of the company and suggest some changes which will enhance the market value of the company in the coming period. But these changes should not be very massive because massive changes are time consuming as well as risky. On the other hand these changes should be important enough the market value of the company. This could be very helpful in the sale of the company at a good value.
Marketing Materials Preparation: When a prospective buyer evaluates a company, he expects that the records and facts of the company should be well documented and organized. If documents are disorganized, the seller could lose the opportunity of selling his company. Properly documented business summaries enhance the chances of the sale as these documents instill confidence in the buyer. Thus it is very essential that the seller properly educates the buyer about the company’s recognition, market share and relationship with vendors, operation and production system, management channels, distribution channels, customer loyalty etc.
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