Passing the Torch: How to Sell Your Business the Right Way

Passing the Torch: How to Sell Your Business the Right Way

Selling a medium-sized business is complex and often emotional, especially when it forms part of a succession plan.

When the Question of Succession Arises

After years of dedication, creativity, and persistence, one day the inevitable question emerges: What’s next for my business?

Family is often the first consideration—will children or relatives take over the company? In many cases, this is not possible due to personal, professional, or geographical reasons. While this may initially be disappointing, it is not the end. It does not diminish your life’s work as an entrepreneur. Instead, it reflects a new reality in which alternative solutions should be considered viable and logical.

Perhaps you have discussed an internal succession plan with key managers or long-standing employees, such as a management buy-out (MBO). It is worth noting that paths like these may carry greater risk due to financial barriers or sometimes a lack of entrepreneurial experience.

If neither family nor internal company succession is feasible, selling the company to an external buyer becomes the next practicable step. To approach this complex process in a structured, realistic, and efficient manner, Victanis has prepared a checklist to serve as your guide for early-stage preparation.

Your Checklist for Selling a Business

Before diving into documents and financials, ask yourself honestly: What are my priorities when it comes to selling the business?

• Long-term security for the company
• Job security for your employees
• The buyer’s values and strategy
• Reliable treatment of customers and partners
• Your own role during the transition phase (e.g., to remain involved as an advisor?)

🗒 Tip: In addition to the financial consideration, a clear set of expectations will help you choose the right buyer

• Conduct a professional business valuation (e.g., earnings value method, multiples)
• Perform a SWOT analysis to assess strengths, weaknesses, opportunities, and risks
• Identify key value drivers such as customer loyalty, technological uniqueness, or market position

🗒 Tip: A realistic assessment helps prevent misleading negotiations.

   Professionally prepare all relevant documentation:

• Financial statements from the past (at least) three fiscal years
• Contracts with customers, suppliers, banks, and employees
• Overview of the corporate structure and shareholder agreements
• Organizational chart, employee structure, and HR development plans
• Overview of investments, financing, and liabilities
• Preparation of an anonymized teaser and a detailed information memorandum
• Business plan or strategic development roadmap

🗒 Tip: Set up early a virtual data room—this simplifies the due diligence process later.

• Develop a – or several - buyer profile(s) (e.g., strategic investor, family office, private equity fund)
• Research suitable candidates
• Discreet and professional outreach via advisors or direct contact
• Attend confidential initial and follow-up meetings, and obtain to a point a non-binding offers (NBOs)

🗒 Tip: A structured process strengthens your negotiating position and signals professionalism.

• Agree on price range and payment terms
• Clarify earn-out clauses, guarantees, and liabilities
• Clarify important issues related to your initial goals – like intended strategy for the company, governance, etc.
• Sign a Letter of Intent with confidentiality and exclusivity agreements

🗒 Tip: Seek legal advice before committing—key decisions are often made in the LOI.

• Provide all documents via the data room
• Review by the buyer’s tax advisors, legal counsel, and possibly technical or HR teams
• Together with your own tax advisor, lawyer, financial director, and external advisor, actively manage the process, answer Buyer’s questions, prepare eventual price and conditions renegotiations
• Draft and negotiate the purchase agreement

🗒 Tip: Good preparation reduces follow-up questions, minimizes risks, and leads to faster contract negotiations.

• Notarisation of the purchase agreement
• Preparation of a detailed handover protocol
• Personal onboarding of the buyer during the agreed transition period
• Targeted communication to employees, customers, and suppliers

🗒 Tip: Communicate transparently and with sensitivity—this builds trust in the new leadership.

Many business owners underestimate the time involved in a structured sales process. From the initial strategic planning to the actual closing, the process typically takes six to eighteen months and sometimes more, from initial strategic planning to actual closing. The specific duration depends on various factors:

• Thoroughness of preparation (e.g., documentation, valuation)
• Market conditions and company attractiveness
• Number and quality of interested buyers
• Complexity of negotiations (e.g., earn-out, management participation)
• Duration of the due diligence phase

🗒 Tip: Start planning early and set realistic expectations. A clear timeline helps reduce pressure and ensures a high-quality process. Rushed sales can lead to financial and strategic compromises.

Conclusion

Selling your business is not only a financial decision, but also a deeply personal milestone. It marks the end of one chapter—and the beginning of a new one, for both you and your company.

With a clear strategy, structured processes, and experienced guidance, you create the ideal conditions for a successful succession solution.

Talk to our M&A advisors – we support you discreetly, professionally, and as your partner on equal footing.