What’s the best way to sell my business?
Selling your business can be long, complex and stressful, especially if your business isn’t ready for the legal process. Here are some useful tips to help you prepare your business to sell:
1) Start planning early
Get your business ready for sale as early as possible. This will maximise the value of your business and help ensure a smooth sales process. Click here for our easy-to-use Company Sales Tool. This will help identify potential issues. You can then deal with these things to avoid them delaying your sale process.
2) Get your accounts up to date
An accountant may be able to help you push cash flow to the bottom line to maximise your sale value. Also, a buyer will want up to date financial information to base an offer on.
3) Appoint your team of advisers
Your team should include a corporate lawyer and accountant. You may also need a corporate finance adviser or business agent to help you find a buyer. You may only ever sell your business once. So it is important to have experienced people helping you get it right.
4) Find the right buyer
This may be someone you know, such as a customer, supplier, employee or competitor. Or you may need help from a corporate finance adviser or business agent. In this case, check their terms before you sign up. Finding the right buyer will likely make the process smoother.
5) Maintain confidentiality
Make sure potential buyers sign a non-disclosure/confidentiality agreement. You should still be careful how much information you disclose too early though.
6) Agree the main terms at the outset
The main terms are usually recorded in heads of terms or a similar document. It is important that any basis for adjusting the price is clear. Also, goodwill between the parties is at its highest at this stage. So you can use this to minimise your liability and negotiate favourable terms.
7) Keep the due diligence well-organised
Due diligence is a buyer’s detailed investigation of your business. You will need to provide a lot of legal and financial information and documents. If you have dealt with any issues that you can at a pre-sale stage, you will be better placed to handle this.
We can help you deal with DD in a streamlined way to provide a clear record of what you have told the buyer. You can use this ‘let the buyer beware’ principle to stop the buyer claiming any of the sale proceeds back from you.
8) Negotiate the Sale and Purchase Agreement
This is usually a long contract containing the terms of the deal. It is important that the agreement is clear and that you negotiate it as far as possible in your favour. This will make it as difficult as possible for the buyer to claim any of the sale proceeds back. It is also important to protect any deferred payments.
Please contact our Corporate Team if you would like to discuss selling your business. Telephone 01603 610911. Email info@leathesprior.co.uk. Or try the Company Sales Tool by clicking here.