What is Sale Readiness?
Selling a business is rarely a spur-of-the-moment, spontaneous decision. In fact, in almost every case, it’s a long, drawn-out, complex process that requires effective planning and foresight.
Just as a marathon runner spends months, if not years, prepping for their next race, your company needs to put in the miles to be in its best shape to attract buyers and fetch the best possible price. This readiness, both operational and financial, is what we mean when we say sale readiness.
But, like our aspiring marathoner gearing up for a challenging event, you can’t just show up and hope for the best.
You need to proactively consider all the important components of your business, anticipating every possible buyer demand beforehand and leaving no financial stone unturned.
At G-Squared Partners, our Sale Readiness team has played a role in dozens of M&A transactions. Our team of experienced sale readiness professionals can assist your business with various financial matters, from cleaning up your books to supporting the due diligence process. Be sure to connect with our team of experts for more information.
What Is Sale Readiness?
In 2022 alone, mergers and acquisitions (M&A) in the U.S. totaled in value to the tune of over $2 trillion. To get a fair slice of this massive monetary pie, your organization needs to put sale readiness at the top of its priority list.
Sale readiness describes the comprehensive list of activities, strategies, and necessary preparations a company must undertake to be ready for the sale.
It’s not just about making the organization look attractive to a potential prospective buyer; it’s about shoring up all your business’s operations and financials, making sure they’re transparent, compliant, efficient, and, most importantly, ready for exploration and scrutiny.
Want to learn more about the concept of sale readiness? Check out our Comprehensive Guide to Preparing Your Business for a Sale.
Key Components of Sale Readiness
Sale readiness is much more than a single action. As we mentioned earlier, it’s a comprehensive process connecting every aspect of your business.
Here at G-Squared Partners, we approach every potential transaction through a structured approach that ensures each area of your business is ready for the sale. This includes working closely with your internal teams alongside the appropriate lawyers, investment bankers, and other external stakeholders.
To help you better understand the sale readiness process, let’s explore some key concepts and actions we undertake here at G-Squared Partners to prepare a business for a sale:
- Restate Financial Statements: maintaining accurate financial records is critical to attracting buyers. We take a meticulous approach to restating financial documents, often going back several years. This ensures numbers align and present a favorable illustration of your business.
- Develop KPIs: key performance indicators (KPIs) are the heartbeat of any business. Our team works with other relevant parties to build KPIs that align with your organization’s values and goals. Again, we work with lawyers and investment bankers, providing relevant metrics to better support and progress the sale process.
- Create Multi-Year Forecasts: buyers don’t just invest in your past performance; they want healthy indicators that your business will be viable in the future as well. Many organizations simply lack forecast data. We’ll work with your team to create robust financial forecasts that outline expected growth.
- Collaboration with Stakeholders: mergers and acquisitions involve several key stakeholders. They need the right information to perform their jobs without issue. Our team curates and funnels this data to relevant stakeholders, like bankers, who will create a CIM (Confidential Information Memorandum) to outline the sale proposition.
- Due Diligence Support: due diligence is often a challenging phase of sale readiness preparation. G-Squared will act as your company’s financial team, providing the relevant information for Quality of Earnings evaluations and any other due diligence necessities to ensure a smooth and transparent review for potential buyers.
- Manage Day-to-Day Finance Functions: consistency, punctuality, and accuracy in financial management underpins the stability of your business. From closing books each month to interfacing with legal teams, we take over these financial functions, ensuring every task is executed quickly and accurately.
Benefits of Sale Readiness for a Company
Sale readiness isn’t only about getting your business ready for the market. Instead, it’s about ensuring you get the best value, experience a smoother selling process, and reduce any last-minute surprises during negotiations.
This is why comprehensive planning is so critical.
With the sale preparation process alone often taking upwards of a year to efficiently complete, ensuring all your financial and operational ducks are in a row can not only position your business for the maximum deal but also save time in terms of unexpected roadblocks.
To underscore the value of sale readiness, let’s explore some other key benefits:
- Proper preparation gives owners a robust exit strategy, offering a clear vision regardless of the eventual outcome of the sale process.
- Sale readiness is the key to risk mitigation. It ensures owners are well aware of the realistic value of their business before entering the market.
- A thorough approach to sale readiness facilitates a smooth transition post-sale, which can lead to more effective tax and wealth management strategies.
- With sale readiness, you set the stage for a smooth sale process. Proactive preparations can expedite the process and reduce last-minute hurdles.
- Most importantly, sale readiness helps maximize the transaction value, making your business more attractive to buyers.
Master Sale Readiness with G-Squared Partners
When it comes to selling your business, preparation isn't just important — it’s mission-critical.
Sale readiness is a comprehensive process that ensures you can realize your company’s full value when the moment to sell finally arrives. It safeguards against unforeseen problems, builds trust with potential buyers, and optimizes your business’s potential.
Investing in sale readiness is the difference between a problem-prone and overwhelming sale process and one that’s smooth and efficient.
Having played a role in more than 50 successful M&A transactions, G-Squared Partners offers unparalleled industry expertise and access to a vast network of sale readiness professionals. Our tailored services, from restating financial statements to producing long-term projections, work together to meet all your organization’s unique needs.
Ready to maximize your next business sale? Connect with the G-Squared team today.