1. Get your house in order
You need to prime your business for a sale by making it as attractive as possible to prospective buyers, much as you would complete unfinished DIY jobs if selling your home. Try and take a step back from the business and view it through the eyes of a prospective buyer – what issues or concerns may they have. If you can try and pre-empt some of these issues you can then take steps to solve or at least mitigate them and present the business in the best possible light. Ultimately, this will also save time when the sales process kicks off – for buyers, surprises = cost, so deal with any issues now.
2. The futures bright…
However, it is not all about ‘window-dressing’ – you need to keep your mind on the future of the business. There is little point in increasing turnover and profits at the expense of customer and staff relations and product or service quality. Prospective buyers will be looking at both present and future value and so a strong order book and brand will also be important.
Consider getting an independent valuation of your business, this will give you an idea of what a prospective Buyer may be willing to pay and can be of assistance during price negotiations. However, while there are a number of ways to value a business, ultimately a business is only worth what a prospective buyer is willing to pay for it.
4. Tax advice
It is worth getting tax advise to ensure that any sale is structured in the most tax efficient way, taking into account your personal and family tax position as well as that of the business. The form of consideration paid for your business will depend on whether you want a clean break from the business or intend to remain involved with the new business following the sale, in which case you may agree to take part of the consideration as shares in the buyer.
5. Auction process or exclusivity
If there are a number of prospective buyers then a competitive auction process may enable the seller to maximise the purchase price. If the business is particularly saleable because it has some valuable new IP or technology, a seller should assess the likely level of interest before granting a period of exclusivity to any one prospective buyer.