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Insight

How to extract maximum value when selling your business

Dan Lowe Dan Lowe

To achieve a successful sale of a business and extract its maximum value, it’s critical that the planning process begins well in advance. Companies that hope to maximise value upon succession should consider planning at least two to three years before a transition.

Even if selling the business isn’t in your long or short term plans, it always pays to be prepared so that you’re agile enough to contemplate a sale if an opportunity arises, or your circumstances suddenly change.

There are various internal and external factors that should be identified in the early stages of the process to optimise business value. This could include a pre-sale review (sell side due diligence) to identify areas that may need to be worked on. Effective planning and preparation enables a seller to better anticipate, understand, and actively manage unforeseen events and keep the sale process on track.

The following diagnostic overview should be undertaken a few years before a sale; it pinpoints the key areas of focus that aren’t limited to, but include:

  • cleaning up the balance sheet
  • ensuring the right management is in place
  • trimming expenses
  • strengthening internal processes
  • introducing new products
  • expanding to new markets
  • investing in other strategies to drive profits, growth and sales.


The financial information is often the first metric that a potential buyer will use to establish their interest levels. Value perceptions are influenced by a business’s historical and projected financial results, as well as anticipated future events – good or bad. Ensuring the financial information is accurate, compliant and ‘clean’ is critical in the sales process to ensure the maximum value can be extracted.

Surprises can quickly derail the buyer-seller momentum and deflate perceptions of worth. If the substance and form of the financial statements lack the quality that would be expected, or if doubts exist over the reliability of the information presented, it can create uncertainties which may impact value perception or even potentially alter the purchaser’s willingness to progress with the deal.

I have seen numerous examples where money has been ‘left on the table’ due to lack of planning, inadequate financial records, insufficient internal processes and a poorly executed approach to the exit event. Given the business will likely represent the biggest asset of the owner, and in the majority of cases the ‘retirement fund’, it shouldn’t be underestimated how important it is to ensure your business is prepared for sale.