How to sell your UK business
There may come a time when your business is valuable enough for you to want to sell it so that you can move on to your next big idea. This may have even been your goal to begin with. But for some, this can be a difficult time, as you're probably attached to the business and the idea that you have spent so long bringing to life. Because the idea of selling could be an emotional time, we've compiled a few tips to help make it easier for you.
1. Make sure the timing is right
Without bringing emotion into this, you still need to make sure the time is right. Be honest with yourself as to why you're selling and why you think it should be done now. Think about any long-term investments you've made through the business, will you be able to see the payout from them? Probably not. Also, think about the natural cycle of the business, are there quiet and busy months of the year? Is the work only seasonal? This will impact the profits of the business and may put potential buyers off.
2. Get professional help
If you think the timing is right and you're sure you want to sell, then it's time to get professional help to ensure the process is as smooth as possible. Hiring a business transfer agent (BTA) is highly recommended. If you're unsure what a BTA is, take a look at the FSB's advice. But in short, they can help you to value your business accurately as well as targeting the right buyers and the transition to the new owners.
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3. Prepare yourself
Your BTA can help with this, but you need to be prepared and make sure that you and your business are ready for the sale. The potential buyers will be asking questions, so make sure you have the answers, especially Why are you selling?"; if they believe that the business isn't viable, or performing too badly, then they will not buy it. So make sure your motivations for selling are clear, honest and to the point.
During this time you will need to tread carefully - the new buyers will need to feel as though they will be the ones that will be coming in and changing the business into what it should be and improving on what's already there. Make them feel excited about what they're buying.
Finally, make sure the business is in a fit state to be sold. All of your records should be up-to-date and as transparent as possible.
4. Put it up for sale, negotiate and sell
Your BTA will help you to create a suitable package and will advertise it across several platforms. Once you start receiving offers it is important to assess the credibility of the prospective buyers before entering into any negotiations. Also, you may want to have confidentiality agreements in place so that you can openly discuss things with the prospective buyer without worrying they will tell other potential buyers about the standing of your business. This is the stage where a BTA comes into their own by acting as an intermediary during negotiations.
Once you're happy with an offer, you will need to go through due diligence in order to make sure the buyer can back up any claims that they have made. This is very important as it's your chance to make sure they are who they say they are; and whether they are the right person to be buying your business.
Now comes the sad part - close the deal. The buyer will sign a binding contract of sale and once that's gone through the sale is complete and you can move on to your next venture.