This is the fourth article in our series on achieving the maximum value from your park business. In this article we look at the options available for selling your park business.
Having made the difficult decision to sell your park business you now need to decide what is the best way of doing so. To do that you should take into account how the type of sale could improve or reduce the value of your business.
We think the best person to sell your business is you, with assistance from your close advisers. You know your business and you know how to sell your products. So why do you not know how to sell your business?
When you sell a caravan on your park, how do you do it? You probably work out who would want to buy it. Then you focus on what the benefits of that particular model of caravan are for that particular target. Then you approach that target and make sure they become aware of the benefits.
What is the difference with a business?
Below is our suggested approach:
1. The first thing to do is to work out who would want to buy your park business. This may be competitors or it may be other businesses where what you do will have a synergy with theirs so 2 plus 2 does not equal four but 6 or more. Do not be afraid to look outside of the box and consider European or international purchasers. You are the best placed person to identify those potential targets because you know your business and your market.
2. Then work out what the value is of your park business. Do you work out what the value is using historical figures and apply a multiplier or do you look to see what it would be worth to a potential purchaser? We suggest the latter subjective approach to optimise the value of the business.
3. Preparing to sell. Back to our earlier articles, the main point is what is the buyer most interested in? Focus on that point and try to enhance it where possible.
4. Approach potential buyers. In your mind this is nearly always the hardest part because you do not want others to know that you are looking for a sale. Why is that? Potentially every business is for sale at the right price. So why hide it? But be wary about providing your competitors with too much confidential information. If you do enter into talks you should have in place a confidentiality agreement. Even then you must be careful about what information you release, especially at the early stages of a sale.
5. Legal Process - the legal process applicable will depend entirely on the type of sale and can vary considerably depending on the complexity of the deal. We would always advise that you take advice on the legal aspects of the sale before entering into any negotiations with potential purchasers so that you are fully informed from the outset. It is important to appreciate from the start what it is that you are actually selling, i.e. are you selling the park business’ assets or the entire issued share capital of the company? If you are not sure what the process includes please call us. We are happy to help and will run you through the typical process without charge.
6. Completion - the time when you are released from all liabilities completely and you walk away with the cash.
The key to a successful sale which produces maximum value is to work out early on in the process who you think would want to buy your park business and then think about how you can make your business more saleable to that person.
In the final article of this series on maximising the value of your park business we will look at what to do with the proceeds of a successful business sale.
If you are looking at maximizing and preserving the value of your park business, or wish to discuss any aspect of running your holiday park, please contact Alistair Latham on (0)1482 324 591