Selling your business – preparation for sale; key items:
Is your business in peak condition?
If not, you are never going to realise its maximum potential.
Consider this: would you ever sell your car without first giving it a valet and ensuring service records are up to date? No. So do the same with your business – clean it up and ensure it is fit to sell.
With that in mind here are some top tips for ensuring that your business is prepared and in “tip-top” condition
- Firstly, obtain a valuation of your business to ensure that your expectations are realistic. This will also give you an indication of what you may need to do to realise its maximum value and if whether now is the right time to go to the market.
- Appoint your trusted professional team of advisors early in the process.
- Ensure that you, the owner, are not the sole focus in the business. The business must be groomed to operate successfully without you. If not this will have a significant negative influence on the sale value.
- Identify areas for building value in your business over a period of time before the sale e.g. Perpetual income models, long term contracts
- Working with the financial and tax advisors within your team to look at the preferred sale structure. Early professional advice can help you take advantage of beneficial tax-planning schemes.
- You need to make your business as attractive to potential purchasers in the shortest but most realistic amount of time by:-
- Ensuring the Intellectual Property within the business is protected.
- Reviewing the shareholders agreement / company ownership and its structure.
- Reviewing and ensuring that all client and major supplier contracts are in place and documented.
- Asking whether you have a significant dependency on certain clients and suppliers? Reducing this business risk to an acceptable level.
- Settling legal disputes.
- Reviewing and ensuring all business governance papers are in place and up to date, i.e. employee handbooks and contracts / leases / policies
- Having your business plan to hand and up to date.
- Having your financial results and budgets to hand and up to date.
- Having secured forward work details and potential future opportunities.
- Having full employee details to hand and up to date.
- Having all business premises details to hand and up to date.
- Ensuring your business is operating at its most efficient i.e. by reducing costs to the optimum and reducing debts to a minimum.
Finally, do not hand over any business information without first entering into a Confidentiality Agreement