Selling a Privately Owned Business – Briefing 1 – Planning
Small business sales have been our core activity and speciality for over twenty years now, so to guide potential sellers through what can be an arcane and arduous process, we’re now publishing a full series of articles outlining the key steps in a normal sale exercise.
The process always starts with early planning. Long experience shows that even if you don’t intend selling in the immediate future, planning for when you do wish to sell is crucial.
Below are ten key issues to consider in getting your business into the best possible shape for your exit.
1. Ensure all shareholders are in agreement and agree sale objectives from the start.
2. The best time to sell is when you are in a position of strength. Consider your trading profile and aim to exit when profits are increasing and likely to grow further.
3. Try to time the sale to coincide with general confidence in the economy and particularly in your sector.
4. Consider the impact of any trading cycles or seasonal changes in your business.
5. Make sure your financial accounts are up-to-date and give a true picture of the business.
6. Put a good management team in place, and as far as possible make yourself dispensable post sale.
7. Review your customer base. Identify key existing and potential customers, and ensure any contracts are properly in place and up-to-date.
8. Ensure any intellectual property rights are properly identified and protected.
9. Attend to housekeeping issues. Look at your business property, equipment, and general internal matters.
10. Last and by no means least, consider a buyer’s viewpoint. Identify potential future growth and think about what would be attractive to buyers.
Whilst undertaking this planning it’s important to maintain a realistic perspective on the whole issue of the sale, including value, and also practical matters. In particular, it’s all too easy to under-estimate the time and effort required to complete a successful sale, so as always, specialist advice and support can be crucial.
More will follow over the coming weeks in this new series of blogs on the whole sale process and related matters.
10 July 2018