How to sell your business Instructions for use

Entrepreneurship is a formidable adventure: from the creation of a company to its sale, the entrepreneur forges a very close bond with his own structure and teams. Selling a business is not the easiest step to take. It has to be anticipated, prepared and managed with a great deal of organization.

Transferring shares in a company is also an ideal way to enhance the value of your assets, and create new investment opportunities. Are you ready to pass on your company?

Let's find out everything you need to know to make this crucial step a smooth one.

Step #1: Preparing to sell your business

Selling your business is not a trivial act, which is why you need to adopt a clear transfer strategy. It requires careful thought beforehand: why do you want to sell your business? In what project, if any, will you reinvest your money? How will you organize your departure? How would you like to pass on your business?

How would you like to communicate with your customers and partners?

That's why it's important to carry out several preliminary audits in preparation for estimating the company's value. A number of functions should be subject to special inspection:

• human resources (number of open-ended, fixed-term and temporary contracts, organization of teams, remuneration, seniority, planned changes),
• production resources (premises and equipment, their condition and plans for renewal),
• and the company's sales forces (sales force performance, customer typology, marketing strategy, distribution channels, customer base, internal processes, etc.).

From a financial point of view, a complete audit of the accounts is welcome, to establish an overall diagnosis of the company's financial health. An administrative, legal and tax audit can be carried out to provide the buyer with all the additional information he needs. Finally, a timetable for the sale must be drawn up in advance.

Step #2: How do you add value to a company?

The next step is to answer a crucial question: at what price can I sell my business?

The value of a company is given by the following formula: Enterprise value = value of shareholders' equity + value of financial debts - cash and cash equivalents + minority interests - share of equity-accounted companies + provisions.

We can also use the "multiples method", which consists of applying a valuation multiple to the company's sales (excluding VAT), EBITDA or operating income.

The multiple used depends directly on the company's sector of activity, and on the metric used. You can also look at similar transactions in the past to find out the valuation multiples used.

Step #3: How do I find a buyer?

There are several ways to find a buyer for your business. First, activate your personal network, leaving no stone unturned: family, friends, customers, suppliers, competitors, etc.

It's common to find a buyer from among your employees, who already knows how the business and its staff work.

Specialized sites such as cessionpme.com or transpme.fr are also available. Local Chambers of Commerce and Industry also have a role to play in facilitating the transfer of businesses by matching supply and demand.

Contact your local department or region to find out what support is available for entrepreneurs looking to sell their business.

Step #4: What steps do I need to take?

Once a buyer has been found, it's time to begin the legal steps required to transfer the business. The first step is to study all the legal and financial implications of the transaction, based on the terms negotiated with the interested buyer.

To achieve this, it is advisable to seek specialist advice (ideally from a chartered accountant or a lawyer specializing in corporate law).

Then it's time to sign the deed of sale. The transfer can be recorded by a notary or by a "private deed" . The list of deeds to be signed depends on the nature of the transfer (transfer of shares, business assets, etc.).

Finally, it is important to anticipate the period following the sale. The signing of a support contract between buyer and seller is an effective way of easing the transition.

The sale of a company requires a great deal of thought and time, so that it can be carried out smoothly and serenely. A properly conducted process benefits all stakeholders: the buyer, the seller and all the company's employees.