With the economy improving and confidence returning to the market, selling your business may be back on the agenda. The decision to sell your business is likely to be one of the most important financial decisions you ever make. You need to decide what is right for you and consider your objectives before deciding to sell.
There may be a range of exit options that suit your needs and a sale is not always the best option. You will need to consider whether you want to sell your business outright or whether you want to retain an element of financial or management control.
The majority of businesses are sold to another business or a privately funded buyer, or you may consider selling to your management team. Normally a sale will be of either the assets of the business such as your customer list or specific equipment, or the shares of the company, whether this is all of the shares or a partial sale. There will also be options for the seller with regard to payment terms and whether you are prepared to accept payment in full or in stages. This will be affected by the terms of the deal and your choices may affect the interest of the buyer.
Before moving forward with a potential sale for your business, you should ask yourself the following questions
- when is the right time for me to sell
- is there a potential purchaser in mind
- does the business have a strong financial record and is it doing well; and
- do I want to retain any control?
A sale will proceed more smoothly if you are prepared and organised. Consider important factors such as the condition of your business and the general state of the economy. It will always be better to sell your business when it is healthy and growth is forecast.
You know your business better than anyone, but most business sales require the involvement of an accountant and a solicitor. The right advisers with the appropriate experience will impact greatly on the success of the sale and ensure that the transaction proceeds smoothly.
We can help you prepare your business for sale by advising how to review your business and its operations and letting you know of any matters that may put potential purchasers off. Business owners should allow themselves plenty of time to get organised, which will ultimately make the whole sale process much easier.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.