Selling your business

There are many good reasons why you may decide the time is right to sell your business. Do remember that outright sale may not be the only option, we may be able to suggest some alternatives. If you are going to sell then try to keep our golden rules in mind.

Seek professional advice early – you will need your accountant and solicitor on board throughout the process with all hands to the pump.

Be well prepared – make sure you have up to date accounts available for the buyer prepared in an appropriate form and that you can produce other key documents such as leases, HP, customer contracts etc.

Set a minimum price in your head and stick to it – don’t even start the discussion if the first offer is below your minimum.

Be prepared to walk away – it is very easy to lose sight of your initial goals and become committed to a deal which suits no-one.

Keep everything confidential – nothing drives away customers quicker than a supplier who is trying to sell out.

Get your buyer committed – a non-refundable deposit is good.

Clear lines of communication – make sure that everyone who should be in the loop is.

Take time – don’t rush the negotiations, they are usually slow and painful so you need to let things take their course and rely on your advisors to get the best deal.

Buying a business

Purchasing an existing business can be a slow and complex process but the fundamentals are the same as for any investment – is the expected return acceptable based on the amount being invested, the level of risk, and the amount of time it will take to achieve? There are some rules to keep in mind during the transaction.

Seek professional advice early – you will need your accountant and solicitor on board throughout the process with all hands to the pump

Be well prepared – gather all the information you can on the potential target. Up to date financial information is vital but you should also be getting as much general background as possible.

Set a maximum price in your head and stick to it – everyone involved will have their own idea on the right price but what matters is what the business is worth to you.

Be prepared to walk away – the more time and effort you commit the more likely you are to accept a less than optimal deal – resist the temptation.

Keep everything confidential – you want as few people as possible to know about the deal. If it leaks then other potential buyers may get involved and customers of the business may become unsettled.

Get exclusivity – the seller will want you to show commitment perhaps by paying a deposit. You should resist but at least get exclusive rights to negotiate for a period of time.

Clear lines of communication – make sure that everyone who should be in the loop is.

Take time – don’t rush the negotiations, they are usually slow and painful so you need to let things take their course and rely on your advisors to get the best deal.