It is always worth getting your ‘business house in order’ well in advance of finding a buyer. This will help the buyer with their due diligence, give them confidence in the purchase and often shorten the period from first enquiry to completion the of sale.
We’ve all seen the many television programmes about getting your house ready for sale to maximise its value and attract serious offers, which usually means having a good clear out, making repairs and highlighting its good points. Few people, however, think about how to prepare their business for sale to realise just the same benefits. If you have time to plan your business sale then it’s worth putting your business house in order as early as possible.
- 1. Consult a good business sale agent. They will look closely at your business, not just from a financial position but also the quality of the contracts and its ‘physical’ presence if, for example, your business is in the retail sector. A good business sale agent will tell you what you need to do to enhance the value and saleability of your business.
- Consult your accountant. Not just to look at value on sale but also to make sure that all of the business’s tax and accounting affairs are in order so as to avoid putting a potential buyer off when they are undertaking their due diligence. If any issues do emerge then try to rectify these before the business goes on the market.
- Consult with your human resources team or adviser. Make sure that all employees have up to date contracts of employment and records; that all disciplinary and grievance matters have been or are being dealt with in accordance with good practice guidelines; that your business has not acted or acts in a discriminatory fashion; that you have employment policies, which employees have been given an opportunity to read and which are fair.
- Consult with your solicitor and have all of the business’s contracts checked. If there are no written contracts then have these put into writing, as these may be a valuable part of your business and may be what attracts a buyer. Make sure that the business is not engaging in any anti-competitive behaviour; check that the business owns or has licences for all of the intellectual property that it uses. Check that the company has complied with all its regulatory obligations under relevant legislation. Check that the title to any property and that any leases are all correct and suitable.