A husband and wife or Lifestyle business like small store a bar or guest house may be selling to people. To reach them they may advertise at the ads section of the business press for themselves, or specialist estate agents. They would usually expect to attain a relatively quick hand over although a deal may involve some form of seller financing where part of this payment is deferred over time, and a brief period of ‘on the job’ training in conducting the organization.
A service company or professional practice like vets, dentists, accountants, estate agents or attorneys will often utilize specialists firm of business agents to market to other firms seeking to expand although junior partners within the company may have the option to buy out older partners that are seeking to retire. This sort of deal will often need a period of consultancy of around say two years to allow for an orderly hand over of their transaction and customer base to the new owners and the cost may involve some kind of ‘earn-out’ in which the value agreed will include a component to be set by future performance. An established industrial Company With a turnover of over a couple million is very likely to have to engage accountants to help out with preparing the company for sale, marketing the company and handling the advisers of the purchaser. The buyer may be an additional business for instance, a competitor in the industry by means of a ‘trade sale’ or a group from within the business’s existing direction a direction buy-out or backed by venture capital VC firm. The buyer will employ accountants to undertake a thorough review of the business’s financial standing and trading performance and prospects a ‘due diligence report’ and payment may in part be made by means of shares or options from the acquiring company newspaper rather than money.
A rapidly expanding high tech Firm with growth plans will have to engage a group of corporate finance consultants to advertise a stake in the business to raise cash for the expansion of the business. Based upon the scale of financing needed, prospective investors targeted might be wealthy individuals seeking to invest in and often to become actively involved as a manager of growing businesses ‘business angels’; venture capital homes searching for investment in the industry; or obtaining a list that entails numerous external investors purchasing the corporation’s shares. This procedure will require the preparation of a comprehensive sales record ‘prospectus’ requiring a range of projections and professionally prepared information that has to comply with complicated regulation and the trade can involve a complex selection of capital instruments like preference shares and/or options set up as part of the new funding agreements.
