How do I go about preparing my business for sale?

Preparing your business for sale – particularly if you’ve established and developed it over many years is a significant decision. But if you’re approaching retirement or want to realise the value or equity you’ve built up, you may be keen to position your business for a potential future sale. If this is the case there are some useful factors to consider:

  1. How much is it worth? The first step is to determine the value of your business. This could involve assessing your assets, revenue, profits, market position, growth potential, and any intellectual property. An accountant should be able to help you here.
  2. What’s your timeframe? Consider the market conditions and the state of your business. Is it the right time to sell? Are there any factors that could affect the value of your business positively or negatively in the near future?
  3. Why do you want to sell? Understanding the reasons behind your decision are important. Are you looking to retire, pursue other opportunities, or is there a pressing need to exit the market?
  4. Are your accounts in order? Ensure your financial records are in order. Potential buyers will want to review your financial statements, tax returns, and other relevant documents to assess the health of your business.
  5. Do your homework: Research the market to understand the demand for businesses similar to yours. Identify potential buyers and understand what they are looking for in an acquisition.
  6. Are you compliant? Ensure that your business complies with all current legislation and consider any legal issues or liabilities that could affect the sale.
  7. Do you want to continue being involved? Think about how you might transition the business to the new owner to ensure a smooth handover.
  8. Keep quiet: Maintaining confidentiality throughout any potential selling process will help protect the interests of any employees, customers, and suppliers.
  9. Be ready to negotiate: Preparing a negotiation strategy will help you maximise the value of your business, so think about what your position is on price, payment structure, and any contingencies.
  10. Seek advice: Working with a team of professionals including an accountant and solicitor can enable you to discuss your plans and seek guidance to help you navigate the complexities.

Remember that preparing your business for sale can be a lengthy and complex process, so it’s important to approach it with careful planning and consideration.