Selling a business - checklist
If you’ve decided to sell your company, it’s important that you put your business in the best possible light to attract potential buyers. Regardless of your reasons, presenting the firm properly is a crucial part of a successful sale; with factors like value, speed, and attention all relying on how good the organization looks to prospective buyers.
In most cases, there will be quite a few improvements that can be made to boost the value of the firm and speed up the process, some of which you may not have even considered. Whether it’s small upgrades or fixing issues before going to market, there are likely to be several opportunities available to you.
Here are just a few of the things that you may be able to do:
Why do you want to make the trade?
Most individuals interested inyour company will want to know the reason why you’ve made this decision – after all, it’s unlikely that someone will opt to put their business up for sale when there’s value to be had. This is why it’s often crucial to get your reason clear in your head, ready for when you’re asked this question during viewings. A few common reasons to sell include:
- Moving and being unable to relocate your business
- Planning for retirement
- Declining performance (it’s often useful to show that there is potential for the organization still)
- Things that are deemed more important than the firm (such as taking care of a family member, or even your own health)
Of course, there are a variety of reasons why you may want to make the trade. It’s always best to be honest when trying to convince a prospect to choose your establishment, so the above are just some examples of perfectly reasonable explanations that most will understand.
Consider what your team can do
If you manage your corporation and you’re a vital part of the business’ operation, it may not be a bad idea to look at your staff and see if there are any employees who are capable of running things for a day or two. For potential buyers, seeing that the workers are all able to perform their work without you being there can be a good sign.
This can be a great advantage, but even if there isn’t anyone on your team who can do this, it’s not too much of a concern, since a lot of entrepreneurs will be keen to getstuck in with their new company after they purchase it.
Gather all the necessary paperwork
Something as simple as locating and reviewing your documents can make a difference in the future, as having them to hand when they’re needed can speed things up greatly for both you and anyone interested in purchasing your firm. In general, you should have:
- A list of the employees and staff contracts
- Any commercial agreements
- If relevant, property lease agreements
- A copy of maintenance agreements
- A detailed overview of business rates
- Leasing/hire purchase agreements
- Statutory books
- Your insurance policies
- Your last annual return
- A certificate of limited company incorporation
Additionally, it’s important to get your books in order, too. Often, you’ll need to have a minimum of three years of trading accounts available for prospective buyers to view. Being organised and professional can be a vital part of selling, so take the time to ensure that everything is properly prepared and is as detailed as can be.
Inaccurate or missing information can quickly turn buyers off, since this is often taken as a sign that the owner trying to hide something, which will only complicate things and waste time later on.
Keep an eye on your business
While it can be easy enough to devote all your attention to advertising your company, it’s wise to split your efforts between them. If your establishment starts to decline because you’re more focused on making a sale, it will likely detract from the value. Doing this may make it more difficult to find people interested in purchasing, slow down the process, and may possibly cost you money that you could have earned – which you’re certain to want to avoid.
One excellent way to do both is to hire the assistance of a professional business transfer agent. If you want someone with experience to take care of the details of selling as you focus on running your corporation as usual, there’s a much higher chance of not only making more money from your sale, but also attracting better buyers and making the trade much quicker.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
We would love to hear what you think about this article and how we could improve it. Please do let us know. However, we shan't be able to reply to your specific questions. If you have a question about a document, please contact us.
If you have noticed a bug or a mistake on this page, or just want to give us feedback, we'd love to know. Nothing is too small or too big. Send your message on this feedback page.