Selling your business can be one of the most rewarding experiences of your life, both financially and emotionally. Having the freedom to make a major change in life, is liberating and exciting. But how to get there….
Preparation
Make sure you have prepared all the information you will need to share with your business broker and your potential buyer. Things to consider are making sure you have the most recent set of accounts filed, and if the closed accounting period was more than 3-6 months ago, try and obtain some management accounts from your bookkeeper. Alternatively, recent sales and expenditure figures will be advantageous. In recent times businesses outlooks can change rapidly over the course of a few months and we see most of our registered buyers wanting to get a good grasp on the current trading position after the latest set of accounts.
Know your worth
Ensure you have calculated any assets the company holds, both tangible (touch and feel) and intangible (goodwill can’t see) so that this can be taken into account when appraising your business. Make sure you explain anything on your balance sheet that is classed as an asset and if you hold an asset register, even better. Look at any long term contracts or customers you hold that have loyalty to the business as all this can add to the potential value of your business.
Get a good broker
It can be tempting to list the business for sale yourself on one of the well know portals, especially if your sale is not confidential, however a word of caution. Just like selling a home, this could be one of the biggest financial decisions of your life and you only get one shot at maximising the value of your business. In our experience, a business that is listed for too long becomes stigmatised and attracts low ball offers from cheeky would be buyers. They think you are desperate or there is something fundamentally wrong with the business. We think it is OK to list either confidentially or not, however confidential listings receive a greater amount of interest, perhaps as a business seems more exclusive this way? Either way, an a Broker that you have a good relationship with is key as they will be able to handle everything from qualifying prospective purchasers, negotiating the sale and pushing through to completion, often with recommended solicitors for sellers and recommended finance brokers for purchasers.
Every business is different, which is why we always recommend using a Broker and make sure you do not pay anything upfront, and only pay for results. You want a motivated selling partner.