Why Are You Trying to Sell Your Business Without a Finance Director?

Written by Paul Mendelssohn on Nov 29, 2017

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Are you trying to sell your business without a Finance Director? STOP!

Heading up the Finance Practice here at global executive search firm EO Executives, I am fortunate to be working with some of the fastest growing SME’s in the country. Typically, I work directly with the founders/owners, I get to hear first-hand their passion, innovation, successes and failures that have taken their business from bedroom to boardroom.

Mostly this entrepreneurial community have a lot of similar traits, they tend to have bags of self-belief, drive and can take people on the journey with them. However, one other similarity you find with this group of highly ambitious and intelligent people, is that they have never exited a business before.

This leave them three choices as I see it;

  1. Do nothing – business is doing well producing good profits
  2. Try and sell it themselves, hashing it together
  3. Hire a Finance Director (FD) (see my my previous blog on 'How to Recruit a Finance Director)

If they are serious about selling, then it will always be option number three. Having a quality Finance Director on-board can help working capital/cash management, help raise further finance, manage the banks, efficient tax strategies and most importantly manage the exit strategy.

Ultimately, a Finance Director is responsible for working along side the CEO/ MD and ensuring the business is heading in the right direction. They are strategic, aid in forecasting and supporting your growth plans and will guide your business through challenging and unexpected economic landscapes. A Finance Director is also well equipped (and probably the only person) with the right experience in helping businesses owners to ensure a smooth sale and handover of their business. This can be a stressful and personal process, so having a Finance Director engaged in the sell can be highly beneficial for many reasons. 

Without a Finance Director (FD) on board you leave yourself open to the following risks, all resulting in a reduced sales price or worse not agreeing a sale at all.

  • In complete or poor financial information, not demonstrating the business in the best possible light
  • Poor forecasting information
  • Lack of experience when dealing with the adviser community

But how long does the process take and when is the time to hire?

This is the million-dollar question, but if you are serious about selling within the next two-three years you need to hire now.

Why? Put simply- there is a lot to do.

The average time to sell a business in the UK is nine months. Before you can even start the sales process, you will need to demonstrate three years of detailed, verifiable financial statements to show credibility. These documents should include an income statement, cash flow statement, balance sheet and the seller's discretionary income. You also need to establish a desired sales prices and carefully choose external advisers to oversee the sale.

I have been in this space for the last 10 years and have built up an enviable network of tried and tested Finance Directors; who have a track record of completing transactions getting the best possible price for the owners.

If you are in the process of selling your business and could benefit from someone with these skills, feel free to reach out directly on: paul.mendelssohn@eoexecutives.com. Or why not leave your comments below?

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