Are you ready for a change and feel like it’s the right time to sell your business? Selling your business is one of the most important decisions you as a business owner will ever make.
The first step would be to set aside some time to consider the reasons for selling, you need to be sure you have explored why you want to sell and what other options you have. The most common reason business owners decide to sell is they no longer have the morale and motivation they used to have. Maybe you need to sit down and look at where the business is and where you want it to be, by setting new goals and targets could help motivate you again.
You may want to sell the business because the industry has been declining and as a result you have decreasing revenues however if this is the case you need to consider if this is a short term or long-term decline. A deteriorating market can very quickly become de-motivating but you do not want to make any quick decisions to jump ship without looking into the reasons for decline and what opportunities there are to change this.
If you have already made the decision to sell your business, you now need to consider when is the right time to put it on the market in order to get the right price. You need to look at the industry your business is in and to review the industry trends so that you can consider if there is anything you can do to enhance your company’s value. You need to decide if you are going to sell the shares (the business in its entirety) or the assets of the company which as always there can be advantages and disadvantages to.
A due diligence of the business will need to be completed, this is comprehensive appraisal of the business from a buyer’s perspective. In order to prepare for the due diligence you should establish the following: – contracts in place with current customers and suppliers, employment contracts, document controls and procedures in place, financial review of previous years and financial forecasts.
A clearly documented exit strategy is essential to ensure you know how you are going to exit the business and what you will do with the money you receive from the sale. In this exit strategy you will need to examine the tax implications from selling your business and any potential tax reliefs you may have to reduce your potential tax liability.
One important thing to have signed by any potential buyers is a non-disclosure agreement, this agreement ensures that information disclosed between the buyer and seller is kept confidential.