How To Prepare Your Business For Sale - IBGrid

How to Prepare Your Business for Sale" is a comprehensive guide by Dr. Mayank Patel, Head of Advisory at IBGrid (subsidiary of IndiaBizForSale), covering key factors business owners must consider before selling. It highlights reasons for selling, challenges in the process, best practices, valuation methods, and the crucial role of intermediaries. The guide also provides insights into buyer expectations and real-world experiences to ensure a profitable exit.

Moreover, if you are looking to sell your business, you can directly connect with business investors at IndiaBizForSale: https://www.indiabizforsale.com/business/investment-in-india

1. Business Exit
Dr. Mayank Patel
Head of Advisory
ibgrid.com

2. Reasons for Selling
Investors are asking for a LIQUIDITY event
Diversify personal net worth
Disagreements between shareholders
Acceptable Unsolicited Offer
Personal event
Succession challenge
Challenges of exponential growth
insolvency/bankruptcy
Consolidation in industrial sector

3. Challenges in Selling a Business
Knowledge Gap–insufficient understanding of the entire process can have an
impact on the selling a business.
Lack of preparation –Neglecting to adequately prepare all essential aspects
before listing your business for sale could lead to inconsistencies during the sales
process.
Shortage of resources –Insufficient resources and guidance in preparing your
business for sale may hinder a seamless sale process.
Emotions-Owners may struggle to detach emotions from selling a business after
investing years of personal and
financial resources.

4. Lesser Capital Expenditure –Buyers tend to be more attracted to
businesses that are already established and operational, and
require less capital expenditure.
Better Valuation –Business buyers want better valuation to
maximize investment value and facilitate attracting investors or
potential buyers if they decide to sell the business.
Reliable information about the business and industry.
Growth potential of the business
What buyer wants?

5. Veteran
hands with IBFS
Adeshsold his
thirty year old
ad-agency with
IBFS
Investor-
entrepreneur V C
Karthicjoins
entrepreneur Fenil
lauds IBFS’s
endeavours
valuation and negotiating with buyers only
interested in licenses, IBFS helped me
successfully sell my ad agency business.
This experience taught me the importance
of timing and knowledge
In 2008, with the help of IBFS, I successfully
sold my US-based employee
time sheet business despite facing challenges such as rigorous legal due
diligence. This experience taught me the
importance of planning for transition
management well in advance to ensure a
smooth process.
Despite facing challenges such as reduced
Investor-
Karthic
entrepreneur
Due to market saturation and
competition, I decided to sell my
business. I received cash offer from
buyer.
negotiating
Despite difficulties in
conveying
scalability, I learned that right time is
crucial when selling a business.
price and
I want to acquire another business to
support low margins; with the help of
the team and IBFS. Despite challenges,
the deal closed, highlighting the
importance of timeand a skilled team.
To scale a business due to low margins,
Business Seller and Buyer Experience

6. Best Practices
Selling Business
Keep growing
your business,
right match may
take time
Qualify buyers
before you share
information
Every business
needs marketing
Prepare business
for the exit
extremely critical
Seek Professional
help, leverage
technology
Stay Involved
Keep patience
Timing is

7. Role of Intermediaries
Preparation of collaterals – investment memorandum, pitch
deck, blind teaser
Valuation input
Initial screening of prospective buyers
Advice for deal negotiation
Deal structuring
Taxation advice
What are the fees charged by intermediaries?

8. Valuation
Discounted cash flow method
Market multiples – EV to EBITDA, Price to Earning
Asset based valuation
Method

9. Some Realities
Selling a business and running a business are both full-time
jobs.
75% of Owners are ready for their Exits, but their Businesses
Aren’t. For most companies, 75% of company value is in its
intangibles.
You would think that they would want to acquire your stellar client base,
but in
an industry characterized by one-to-one client relationships, loyalties are
difficult to switch. So, your client portfolio and historical business figures
held little value for the prospective buyers.

10. How we can help you
Offline Events
Online Platform
CuratedContent
Advisors Network
Profitable Exit
Investment
Distribution
Partnership
Franchising
Mergers &
Acquisitions
Joint Ventures

11. One stop deal management
Match Making
Deal Discovery
Qualify prospects
Due Diligence
Transaction Support
Multiple deal tracking

12. 8000 422 133
[email protected]
www.ibgrid.com
Let’s discuss your growth projection