Now that you’ve decided to sell your business, you need to be able to present the business in its best light to potential buyers. Similar to selling a house, general improvements can add significant value to your selling price and enable you to achieve your desired selling price.
It’s always better to identify any issues or areas for improvement before you reach negotiations with a buyer so that you have time to correct any issues and avoid any pain further down the line.
Below our team have identified a checklist of points you should tick off before and during the sale of your business.
Get your books in order
Selling your business will normally require that you have at least three years of trading accounts for the buyer to review. The better prepared your accounts and the more detail you can show the more organised and professional you will look to the buyer. This will likely also reduce the due diligence time required further down the line. A lot of the issues we come across are to do with inaccurate or missing accounts – this tends to put off buyers as they see this as trying to hide the financials.
Find your paperwork
At some point in the process you will need to locate and review your relevant paperwork including company incorporation documents (if you are a limited company) and supplier/buyer contracts, leases. All paperwork should be up to date and to hand for when they are required.
The following paperwork will likely be required at some point of your business sale:
- Certificate of limited company incorporation
- Statutory books
- Last annual return
- Copy of any maintenance agreements
- Copy of leasing or hire purchase agreements
- Copy of any commercial agreements
- Details of business rates
- Property lease agreements (if applicable)
- Insurance policies
- List of all employees
- Employment contracts
Maintain your focus
Maintaining focus on your business is essential. It’s all too easy to get focussed on the sale of your business and lose focus on the day to day running of your business. Ensure you receive the best price for your business by keeping your focus.
Review your current team
If you’re an owner manager and your presence is vital to the functioning of the business then you should consider whether you have any current staff that could take over the day to day running of the business. This will reassure the buyer that there is the experience and knowledge in place to ensure a smooth transition. If you can’t think of anybody don’t worry, many business buyers will be looking to get stuck into the business they buy.
Clarify your reason for selling
Buyers will always want to know why you are selling. Think about it from the buyer’s perspective, if the business has real potential then why are you selling? Get your reason clear in your own mind before you meet with potential buyers for the first time.
If you have any questions about how to prepare for the sale of your business then please feel free to call John Crayford on 0800 987 0813. If you have yet to put your buinsess on the market then you can arrange for a free business valuation to get started or view our collection of selling guides.