Selling a company that you have built with love and care over the years is a major decision that requires careful consideration. Think of your company as an airplane that you have been piloting for years. Together you've gone through turbulence, scaled highs, and occasionally faced the necessity of a sudden descent. But as in any good flight mission, there may come a moment when it is appropriate to hand over control to someone else, or to place the aircraft under the wings of a larger flight fleet and prepare for a new flight. What can inspire you to sell the company you have built with love and care? And how do you know when the right moment has come to change the pilot? Let's look at it with lightness and a pinch of humor.

What can be the reason for selling the company?

1. Intergenerational change: have you been piloting the company for a long time and life has it that you don't have a suitable successor in your family who sooner or later could take the captain's seat? Would you like to enjoy the resources that your company has built up under your command over the years?
2. Calling new remotes: life is full of discovery and you may feel it's time to spread your wings towards new adventures beyond your current flight level. It's never too late to start doing something completely different than what you've been doing up until now. The capital obtained from the sale of the company can be a suitable springboard for new adventures
3. The need for a larger airline: your company can continue to grow, but it would be useful if it could be placed under the wings of someone stronger and thus benefit from his position in the markets, his access to resources and orders. Finding someone with multiple or larger aircraft in their fleet can be the way to reach your company's full potential.
4. Meteorological conditions: just as pilots must monitor the weather, businessmen must monitor market conditions. When the forecast indicates favorable conditions for takeoff, it may be time to sell.
5. Personal circumstances: Life changes may require you to lower your flight level and pay more attention to the ground beneath your feet. We only have one time on this planet. We do not cheat on health. Our children will only be children once. One of my favorite sayings goes: "Work will wait until you show the child the rainbow, but the rainbow won't wait..." Selling a company can be your safe landing.

In practice, we usually encounter a combination of several of the above reasons. Decision making can be all the more complicated when the company has several partners and each of them has (which is common) different preferences. For example, when each of the companions is of different age. The older ones want a well-deserved rest, and you can read in their tired eyes that they no longer have the strength to come up with new strategies, they don't want to wade through the tangle of legal regulations, face the controls of various institutions and the demands of business partners.

On the other hand, the younger partners would like to give it another try, but perhaps they do not have the expertise and experience necessary for the outlet and production of the product that is the subject of the company's activity... A complicated situation.

When is the right time to sell a company?

• When the sky is clear: Favorable market conditions are like clear skies for your journey – they signal that it's time to sell. In such a situation, it can be considered that the profits from the sale of the company will be maximized
• When the company struggles in rainy and windy weather for a long time, has no orders and no outlook and wants to eliminate the risk of a hard landing; sometimes it's better to sell cheaper now than to wait for the situation to improve and risk not selling at all or on even worse terms
• When the logbook is fine: Make sure your company is like a well-maintained airplane, ready to hand over to a new pilot or a new airline. This increases your chances of a successful sale. In one of the next parts of the series, we will tell you how to do it
• Preparedness is key: Having everything ready for sale is like having the log book updated, the flight plan thought out and the flight team on standby. This means you are ready to hand over the drive. And only in such a situation can you ask for the most money for your company, which is often your life's work
• There is consensus among individual crew members selling a company when all partners act in unison is ideal. However, it may happen that there is no agreement between the partners about its further direction. For these cases, it is more than appropriate to have an arrangement between the partners (for example, in the so-called "SHA" - "shareholders agreement"), how to proceed in a situation where the majority decides to sell their shares. For these cases, it is appropriate to have pre-emptive rights, tag-along and drag-along rights negotiated, which will ensure that even minority partners will have the obligation (or the right) to sell their shares to the investor. This is the only way to ensure a meaningful sale of the company, because a company where a minority partner who did not agree to the sale would remain will be difficult to sell and the price will correspond to that...

záver

Selling a company is like landing after a long and difficult flight. It is important to carefully consider your motives and timing so that your handover of the cockpit goes smoothly. Whatever you decide, remember that every flight ends with a landing, and every landing opens the possibility for a new takeoff. Consulting with financial advisors, legal experts and M&A specialists can help ensure that your sale goes smoothly and on the best possible terms. Get ready for a new takeoff to unknown heights!

Do you need advice or representation in the sale of a company? Do you have any comments about our series? Contact us! We have many years of experience in selling companies!

JUDr. Ing. Jan Vych, attorney and partner