Selling a business is no easy task. That’s why it’s important that you’re properly prepared well in advance. You’ll need to focus on why you want to sell the business, finding legal assistance, reviewing your financials and much more. To make it easier for you to identify the tasks you need to complete to be ready to sell your company, we’ve created a selling a business checklist:
While it seems obvious, you need to understand why you’re choosing to sell your company. Many people sell due to retirement but we’re also seeing an increase in sales from younger business owners who are looking to make a profit and start a new business venture. Understanding why you’re selling will help you navigate the goals and outcomes you want to achieve from it.
During this process, you’ll want to understand the financial outcome of the sale to see if it’ll help you meet your goals.
Legal assistance is an excellent way to ensure you’re fully prepared to sell your business, as they’ll provide guidance on how to arrange the sale. They can help with appointing the right team of advisers in order to find a buyer, get the best deal and organise your finances.
At Legal Clarity our Corporate team will help you negotiate and draft your documents, ensuring your sale is cost-effective and timely.
When getting ready to sell your business you should identify areas that need improving. This could include:
When identifying any risks within your company, you should look at them in the same way a potential buyer would see them. This will help you undertake a thorough review that allows you to solve any issues and get the best sales value. You’ll need to look into:
It’s also important to review your legal documents, such as employment contracts, lease agreements and customer contracts.
All of the above can affect the value of your business. However, when you understand any potential risks and address them at an early stage it shows that your company is well-run, encouraging buyers to purchase your business at a good price.
Once a NDA or confidentiality agreement has been signed, you should gather at least three years worth of financial information to share with your potential buyers. This will give them a good idea of how well your business is performing, encouraging them to follow through with the deal. You should collect data on:
You can also prepare for their questions and due diligence enquiries in advance showing that you’re taking the sale seriously and care about the future of your company.
Looking for a buyer can begin early on in the sales process. You should think about the type of person you want to acquire your business, their motivations and values. You may already have someone in mind. If that’s the case, it’s a good idea to put together an anonymous sales memorandum to send over to your desired buyers. Your memorandum should include information on what you do, your USPs and why you’re selling your business.
If you’re considering selling your business, our Corporate team is here to help. We pride ourselves on working with you to curate the best deals and agreements. But if your original route doesn’t go to plan or may not be the best fit for your business, we’ll help you find alternative options. Get in touch to see how we can help.