Selling a business is a time consuming and very involved process. From researching the market and finding a potential buyer, to managing the due diligence process and negotiating the various legalities, there is undoubtedly a lot to do. However, preparation and a thorough understanding of the buyer’s expectations can help to streamline the process.
A key issue with owner managed businesses is often who will be around to run things when the shareholder exits? Often, client relationships will be with the vendor, leaving the buyer to question how the business will be affected once the deal is done. Will these clients be lost? Who else knows the business well enough to tackle operational issues which may arise post sale? Therefore, implementing a strong management team prior to your exit provides the buyer with confidence that the business they are buying will continue to be successful post completion.
Organisation of, and accessibility to financial records is paramount to minimising the impact and interruption of the due diligence process. The buyer will review your accounting records for at least the last two years and a well organised, clean audit trail will again reassure the buyer that there are no hidden skeletons. Consider, are your HMRC liabilities paid up to date? Are there any ongoing legal claims which may not be insured?
If you are thinking of selling your business in the next three years, we would advise talking to your corporate finance advisor sooner rather than later. Advanced planning and preparation are key to maximising the value of your business.
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
Disclaimer
The information was correct at time of publishing but may now be out of date.
