A number of complex challenges face the healthcare industry – in both the public and private sector - and will potentially have an impact on the sale of your business, the price you achieve, and whether or not you are able to meet your major objectives.
Hiring the best legal, financial and business advisors will make the process easier, and ensure the money you receive from the sale is extracted and invested in the most tax-efficient manner.
So how can you persuade interested parties that your business is a good investment? Apart from providing compelling financial information, you need to focus on the challenges you face every day, and demonstrate how you overcome them.
Initially, you will need to determine your overall aims and objectives so that you can present your business in the best light. In practice, the process starts with a professional business valuation which is included in the Information Memorandum.
This also lays out details of how the business works, its customers, employees, and finances. Using a broker experienced in the industry is advisable as they will make the process smoother, and allow you to run the business without distraction.
The financial aspect of the Information Memorandum will clearly be of particular interest to prospective buyers. They will want to view financial statements, profit forecasts, asset valuations, and details of all debts and liabilities.
The Information Memorandum is distributed to interested parties, and because this is a relatively comprehensive overview of your company’s financial health, you should prepare a confidentiality agreement to be signed prior to issue.
You may decide to allow visits to your premises to give potential buyers a better picture of the proposed investment, but this also introduces confidentiality issues.
Those particularly interested in buying your business will undertake due diligence measures to ensure the information they have been given is accurate, and reliable enough to use as a basis for their investment decision.
They may request warranties or indemnities that offer protection in the future:
Again, it is vital to obtain professional guidance when such binding agreements are requested by purchasers. This will protect you from taking on excessive future liability, and limit your exposure to the risk of personal debt.
A Letter of Intent (LOI) details the terms you have agreed. It is non-binding in most instances, but indicates serious intent from both parties. Also known as a Heads of Term Agreement, the document establishes a timeline for sale as well as detailing how payment will be made.
If you need further advice and assistance in selling your healthcare business, request a free consultation with Selling My Business. We will ensure a smooth process, taking into account the inherent problems your industry has to overcome. Call one of our experts in complete confidence.
An information memorandum, sometimes also known as a sales memorandum, is a document produced prior to selling your business.Continue Reading
Essentially, due diligence is a thorough investigation which will be carried out by a prospective buyer prior to signing a contract, but after a formal offer has been tabled and accepted.Continue Reading