Have you thought about selling your business?

People starting a business are encouraged to prepare a business plan, in part to show themselves and other parties that what they want to do makes sense and will make a profit. Few owners think about selling the business at this time, yet the goal over the long term is to make a return on the financial and emotional investment made when starting the business and over the years ahead. So, why not consider from the start how that return will come about.

Few people get to sell more than one business and if they get it wrong, by not achieving the true potential value of the business, there is no going back for a second try.

Business owners need to plan for the sale of their business and set a realistic time scale. A minimum of three years is recommended. The business needs to be groomed during this time with profits being driven up and all accounting, legal, tax and VAT issues completely up to date and transparent.

One of the major reasons for this is that the buyer’s solicitors and accountants will have to carry out due diligence checks. This involves gathering information about all aspects of your business so that the buyer can:

  • make an informed decision
  • modify the terms of the sale if necessary

Among other things, they will want to see profit-and-loss statements, tax returns, any relevant leases and details of any outstanding loans, with repayment schedules.

Selling a business is a complex process and business owners are advised to seek professional help from the start.

To be continued…

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