Selling your company: how to prepare and maximise value

Most entrepreneurs start thinking about selling when it is already time to sell. That is too late. A company’s value is built before it goes to market: the best deals are prepared one or two years in advance, while there is still time to fix what depresses the price. Selling “as is” almost always means leaving value on the table.

What buyers really look at

A buyer does not pay for the past, but for the future the company can generate — and for the risk that something goes wrong after the handover. Every risk factor translates into a discount on the price or into a portion of the payment being deferred. Preparing means reducing these risks before the buyer discovers them on their own.

Getting the accounts in order

The first testing ground is the financial statements. They must be:

Consistent from one year to the next, with no unexplained items.
Clean of the owner’s personal elements mixed into the business (cars, private expenses, non-operating real estate).
Documented: every number must be traceable.

Messy accounts breed distrust and lengthen due diligence. A normalisation of the statements — which separates real profitability from extraordinary items — often brings out a higher EBITDA and therefore a higher value.

Reducing dependence on the owner

This is the factor that weighs most heavily in small and medium-sized companies. If the business works only because the founder knows the customers, deals with suppliers and keeps the processes in their head, it is worth less to a buyer: in buying it, they buy a problem.

How to reduce dependence:

Delegate responsibility to a second tier of people.
Put processes and procedures in writing.
Transfer key relationships to several contacts.
Build an organisational structure that holds up without the owner.

A company that runs on its own is worth more and is easier to sell.

Making revenue recurring and diversified

Two characteristics increase value directly:

Recurrence: stable, predictable income (contracts, subscriptions, maintenance) is worth more than one-off revenue tied to individual orders.
Diversification: if a few customers account for most of the turnover, the risk is high. Losing one customer after the acquisition can change everything.

Broadening the customer base and turning one-off sales into ongoing relationships is work that pays off at the moment of sale.

Sorting out legal and tax matters

Before selling, it pays to clean house:

Check the articles of association, the share or members’ register, the minutes and signatory powers.
Make sure the relevant contracts are signed, up to date and free of clauses that trigger on a change of ownership.
Regularise your tax position (cantonal and federal taxes, VAT at the standard 8.1% rate) and eliminate latent risks.
Clarify ownership of trademarks, patents and software.

Every irregularity uncovered in due diligence becomes a request for a discount or a warranty.

Thinking about the structure of the sale

The way ownership is organised affects the net result. In Switzerland, the sale of shares or quotas by an individual is taxed differently from the sale of individual business assets. The structure must be assessed well in advance: changing it at the last moment is difficult and sometimes impossible. The possible separation of real estate from the operating business also deserves early thought.

Preparing the documentation

When negotiations open, having an orderly data room ready conveys solidity and speeds everything up: financial statements, contracts, staffing situation, permits, customer data in aggregate form. A prepared seller negotiates from a position of strength.

In short

Value is built beforehand, not at the moment of sale.
Clean accounts, less dependence on the owner and recurring revenue raise the price.
Legal and tax matters must be sorted out in advance.
The structure of the sale must be planned with one or two years of lead time.

How we help

We prepare your company for sale: we normalise the accounts, reduce the risk factors, set up the most efficient structure and build the documentation so you reach the market in the best possible position. Let’s talk about your sale project.