How to Prepare Your Business for Sale

Selling a business is a significant decision that requires meticulous planning and preparation. You may have been planning your exit for years or very quickly decided that you want or need to explore the sale of your business. Either way, there are crucial steps that you need to take if you’re going to first and foremost attract a buyer and then make sure that you’re in a position to negotiate the most lucrative transaction you can whilst securing agreement to the terms of sale that you want.

Here we’re going to look at how to navigate the process of preparing a business for sale so that you can get the best outcome.

Understand your ‘why’ and consider the timing

Determine your reasons for selling and evaluate the ideal timing. Consider market conditions, business performance, personal circumstances, and your readiness to transition out of the business and what life after sale looks like for you..

Organise your financials

Potential investors/buyers will always want to understand the current state of play and how the financial position of the company has changed over the past three to five years.

Get ready to be able to present income statements, balance sheets, company accounts, tax returns, cash flow statements, and any pending or recurring expenses. Developing a weekly management report of key performance indicators is also a key step.

Get a business valuation

Engage a professional business appraiser or consultant to conduct a valuation. Understand the true, present value of your business as early as you can. Seek the assistance of a professional who can not only provide a current valuation, but who can assist you with the rest of the process from here. A professional business broker will work with you to understand your current position and your objectives. They will be able to help you create a complete plan to get you from where you are now to where you want to be when it comes to completing the sale.

Optimise operations

Make your business as profitable and efficient as you can. Look to pay off any outstanding debts, streamline operations, and resolve any legal or compliance issues to present a clean, uncomplicated financial picture to potential buyers.

Refresh your ‘front of house.’ Does your branding, marketing materials or premises need a facelift? It’s important to make sure that how you present the entire business is in line with what potential investors will expect and your strategic plans.

It may be that you’re thinking ahead of time and planning to sell in three to five years. This gives you an opportunity to prepare perfectly. Redefine your image, create new marketing and sales campaigns to facilitate growth, and freshen up the entire operation. Get all the necessary foundations in place so that a new owner can just hit the ground running. Do everything you can to maximise your business’ value and all-round appeal to potential buyers.

Document business processes and IP

Document standard operating procedures, key processes, systems, and anything else that you need to showcase how your business operates day-to-day. A potential buyer will want to see a smooth, seamless operation at work.

Intellectual property can be a huge factor when it comes to building your value too. Organise all the paperwork you have relating to IP rights, trademarks, patents, copyrights and any other protections you have in place that could lead to future realised value for a buyer.

Seek professional guidance

If you haven’t already been working with an advisor since your initial valuation, now is the time to get your team together to manage the sale and get you the best deal!

You will want an experienced business broker in your area to get involved at this point. Depending on the size and type of your organisation, you may also need them to work closely with your accountant and any relevant legal professionals.

Your business broker will:

  • Identify potential buyers and market your business strategically
  • Negotiate with interested parties on your behalf
  • Close and complete the sale
  • Plan the transition and help you make a smooth handover

Find your local Business Partnership

At Business Partnership we can provide you with a free valuation today.

There’s never any obligation and it’s always confidential. Find out what we could achieve for you and how we can help you every step of the way.

Call our team on 0207 145 0040 or find your local contact here.