Setting the agenda for selling your business
You have built up your own business, navigated what may have been a long and rocky road, and you now own an established and profitable concern. The time has come to think about its long-term future. You might have heirs who want to carry it on after you retire or managers who might want to buy it out. But if not, an eventual sale may be the best way of realising your investment of time and money.
This will mean grooming your business to make it as attractive as possible to potential buyers. Ideally you should review all aspects of your business at least two years before putting it on the market. The following are some of the areas you should start thinking about:
Make sure your finances are sound. So you need good credit control and regular billing.
You might be able to cut costs by renegotiating agreements or selling underused equipment.
Develop a pattern of growth, if you can. Buyers like stable profits with some growth from year to year. You might be able to control the timing of income and expenditure to achieve attractive results.
Be realistic about your sales forecasts.
Make sure you have a strong management team. You will not achieve a good price for a business that depends too heavily on your own skills.
Polish your business plan and make sure that it sets out a realistic strategy for further growth.
Ensure that your business is legally sound. For example, it should comply with legislation on employment, health and safety and waste management.
Make sure the business has legal title to its assets, especially any intellectual property.
Check that all your agreements and contracts with suppliers, customers and others, and all leases are on a firm footing.
Make sure that you have reliable and legal IT systems that work efficiently and provide you with the right management information.
Are you aiming to sell the business assets or shares in a company?
If you expect to sell shares, make sure the capital gain will attract business taper relief. Shares in companies that hold non-business assets, such as excessive cash or other investments, might not qualify for this valuable relief.
We can work with you to prepare your company for sale, and when you are ready to go ahead we can help with deciding a price and negotiating the terms.