Management Buy-In Roadmap: here's how to get in on the right foot

Whether you're buying or selling a business, it's not something you do every day. In fact, presumably it is the first and only time. The procedure of a Management Buy-In is therefore unexplored territory for most people. A sound step-by-step plan for a Management Buy-In including good advice can help you quite a bit.

Roadmap Management Buy-In

1. The search

The Management Buy-In roadmap starts with the search for a suitable buyer or company. First make an inventory of your wishes: which requirements are non-negotiable and where are you willing to compromise? Perhaps you have a company with a certain number of employees in mind, but it could be more or less. Perhaps you are looking in a specific industry, but there is room for adjustment even if you see great opportunities in other areas.

2. The introduction

In this kind of process, you cannot do without a personal click. Sometimes it is there right away and the favor factor is immediately present; other times, building a personal relationship takes more time. For the future of the company and staff, it is important that you develop a good bond as buyer and seller.

3. The confidentiality statement

Before you exchange privacy-sensitive information, you should sign a confidentiality agreement. After all, you will be divulging all kinds of accounting data and other trade secrets. You can include a penalty clause in the confidentiality agreement. Should either party violate the declaration, you can sue for damages.

4. The valuation in a Management Buy-In.

An important step in the process is the valuation. How much is the business worth? An all-important question for both buyer and seller. There are several calculation methods available to determine the value of a business. Consider the market value, asset or income approach.

5. The due diligence process

Once the valuation has been completed and it is clear what the company is worth, it is common for the buyer considering a Management Buy-In to have a due diligence or bookkeeping investigation conducted. That is, he checks whether the information provided is correct. Just as the seller has a duty to report, the buyer has a duty to investigate.

6. The letter of intent

The letter of intent, also known as the letter of intent, lays down in outline what has been agreed upon. This can sometimes go very far, right down to price agreements. It is important to know that in many cases such a letter of intent is legally binding.

7. The financing options of a Management Buy-In.

A Management Buy-In requires money. At an earlier stage, you have undoubtedly already found out whether the company of your choice is financially feasible for you. Now is the time to determine whether you actually have sufficient investment opportunities.

8. The negotiations

Negotiation is perhaps the most important part of the sales process. Precisely because it is a matter of balancing: the selling party is selling a property that is close to his heart and that he has often put a lot of time into. Now he wants as good an amount as possible for it. The buyer obviously does not want to pay more than necessary. At the same time, it is important to keep personal relationships good. Therefore, it is better not to do the negotiations yourself. A lawyer specialized in company takeovers can help you. His years of experience and strong social skills will ensure that the negotiations proceed optimally.

9. Closing the deal

The best moment of the sales process: closing the deal. Of course you will have a specialized lawyer draw up the purchase contract and check everything, but once everyone has given their approval on the Management Buy-In, it is time for the final signature. And a bottle of champagne!