14th August 2023Sell Side Health Check

If you are looking to sell your business, or to exit an existing investment, have you ever considered undertaking a financial health check?

In our experience across a range of M&A transactions, one of the biggest contributors to holding up a deal, or a deal potentially falling through, is the lack of preparation by the target before marketing their business for sale. Poor, or lack of detailed financial information can lead to unexpected findings by the buyer or may give the impression of a badly run business, neither of which bode well for price negotiations or indeed for the associated professional costs of selling.

By undertaking a health check, we can help prepare you for an impending sale process by identifying areas of the business that require additional attention in the lead up to a due diligence process and advise you on how to manage this as you work through the sale process.

Remember, selling your business is in some ways akin to you selling your products or service; you want your buyer to have confidence in the business, its financial information and in management personnel so that you can maximise your return.

When carrying out a health check, we will undertake a high-level review of the financial affairs of the business, to identify areas of weakness and suggest improvements.

Key areas of focus:

• Review of financial accounts and accounting records to ensure these are in order, including reconciliation of key control accounts and assessment of underlying supporting information
• Assessment of the accounting software to determine whether it is fit for purpose, or whether an upgrade may be required
• Review of management information, KPI’s and analysis to hand, including recommendations for where additional detailed financial analysis can be prepared which would better highlight the key selling points of your business
• Review of key balance sheet items and trading results to determine areas that could be of concern during a sale process, including ageing of debtors, creditors, and stock
• Staff contracts and employment records
• Corporation tax, VAT and PAYE record keeping

The review will be tailored to the business to ensure that key areas of concern are being considered.

Reach out to the Transaction Services team, where we can have an initial discussion to determine your strategic objectives and how we can help you achieve them through a tailored approach.