5 tips for planning your business sale

How to sell a business

Whether you’ve set up your business with the goal of selling at a profit – or have simply come to the end of the road after years of careful curation, you’ll want to maximise your opportunity..

It’s important to start planning early – no-one ever got the best deal with an eleventh-hour sales pitch. If you get your house in order, you’ll be ready to hit the ground running when you’ve decided that the time is right to sell. Start with your ultimate goal in mind – the price you want to achieve from your ideal buyer – then work towards making your business the perfect proposition.

1. Build a great team

Your business will only look viable to a buyer if it’s capable of succeeding without you. So plan your strategic exit by creating a management team that is empowered to run day-to-day operations, enabling you to take a back seat – and your prospective purchasers to imagine themselves stepping into your place. It may be an idea to offer your top employees an incentive to stay on after the sale to reassure buyers of a seamless transition.

2. Keep your customers on side

It’s crucial to protect the areas of your business that have the potential to affect its performance – and its price. If much of your success is dependent on a handful of key suppliers or a couple of really important customers, you’ll want to protect these relationships as far as possible to allow you to reassure potential buyers of their ongoing value. Try to remove risk by confirming contracts, leases and supplier arrangements.

3. Consider the handover

Make the transition as easy as possible by documenting processes and procedures. Preparing manuals for the various parts of your business may sound like a lot of hard work but it will create structure that reassures buyers and will demonstrate that you take a professional approach to business affairs. If your paperwork – H&S policies, staffing arrangements, ordering processes – makes you look organised and gives an incoming buyer an easier ride, you’ll be quids-in.

4. Pin down the detail

Are you selling your business or its assets? If your buyer acquires the business in its entirety, taking the assets as well as the liabilities, they’ll want to mitigate risk by undertaking their own due diligence process. Address any problems that could devalue the business or delay its sale: no-one will want to acquire a business with an outstanding legal dispute, for instance. Carry out an internal exercise to see what a potential buyer’s investigations would uncover, and then resolve them.

5. Carry on regardless

Whatever your future plans, now is not the time to start winding down. You may actually find yourself putting in extra hours in the months leading up to a sale. Bring your paperwork up to date so buyers can verify the figures for themselves, and focus on filling your order book and ensuring smooth running. You’ll need to keep your foot down but if you work hard at this point, you’ll be popping the champagne cork a few months down the line.

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