The three key aspects of selling your business
Whilst its difficult in the short term to fundamentally affect the sale value of a business, or the methodology used, much can be done to ease and improve the process. The biggest difference here can be that of a likely sale as opposed to likely failure, but you will at least save time and money in the long run and almost certainly enjoy better terms as a result.
The three main things that will make a difference are:
Make the business less reliant on the owner.
Whatever the reality, the biggest concern a buyer has is that the business will fall over once the buyer has left, so put systems and processes in place, empower staff members or put a proper general manager in place. Make it so you really could take a three month holiday at short notice without impacting the business!
Corporate governance is a big, dirty and misunderstood expression but if your administration is poor it’s just a matter of time before you’re found out. This will lead the buyer to chip at the price at best, or withdraw. Everything needs to be covered but the common failings we see are in financial records, and those relating to properties and staff. Don’t even think about selling if you’re behind with any statutory returns!
Supply chain and route to market.
The buyer will want assurances that sales and profits will continue once you’re gone, so make sure your suppliers will still supply (remove any personal guarantees or undertakings) and that T’s & C’s with your customers are current and fit for purpose. Contracts help but are not necessary – evidence of long term repeat or recurring trade is just as good. Similar to point one, make it clear that they are dealing with the business and not you!
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