It’s long been said that time will kill all deals. That has never been more true. The global uncertainties brought on by the Trump trade war with China and Brexit, coupled with tightening credit conditions in Australia, have started to really bite private business transactions.
Often these risks don’t have a direct impact on a particular business. But, they still play into the broader question in a buyer or investors’ mind – is this the right time to buy / sell / invest and at what price?
So what can you do, if you are looking to sell your private business, or raise capital for growth?
More than ever, be well prepared before the transaction commences. The risk of a deal falling over increases the longer it takes for a buyer or investor to move from interested to committed. The dream days of competitive tension are harder to achieve and with only one buyer or investor in the mix, creating tension around the timetable can be tricky.
Have your data room set up and ready to go, so you can push the timetable from day 1.
We are seeing due diligence taking longer and digging deeper, with an increased emphasis on shifting risk to the seller or to the existing business owners. Uncertain times mean buyers and investors are cautious and are taking longer to get comfortable. So identify key risks in your business upfront and take steps to mitigate them (this is good business practice in any event) or be ready with a solid explanation to satisfy a buyer or investor.
Most importantly, reality test your expectations. The wasted time and cost of a failed transaction can be avoided if you go into the process with realistic outcomes in mind.
We can help to prepare you and your business for a transaction to allow you to exit or grow your business. Being prepared now may be the difference between an unexpected offer being converted into a successful transaction or being a missed opportunity.