The necessary procedures taken to sell your business easily!
A Complete Guide To Selling Your Business
The necessary procedures taken to sell your business easily!
2. External Help
4. Prepare To Sell
5. Marketing & Selling
6. The Ideal Buyer
7. Negotiation & Sold
1.Taking The Decision To Sell
Identify key reasons why a buyer should be interested in your business.
Deciding to let go of your business is often very emotional from building such attachment to the business. Some of the most popular reasons to sell:
Capitalisation Reaping to the dividends for many years of hard working by capitalising.
Health Issues The owner may be in ill health and need to sell the reason on health grounds.
Limited Potential Not seeing potential or seeing poor performance are likely reasons to sell.
New Project Entrepreneurs may wish to move on and have another project in mind.
No Longer Enjoyable Some owners may not enjoy operating the business anymore.
Personal Debt Successful businesses can be sold to pay off owner’s personal debts.
Work/Life Balance Business owner's may wish to sell their business in-order to maintain a healthier balance of work and life, or even consider retirement
2. External Help
You will need help from the following
Business owners won’t have the legal/accounting experience of selling a business. To ensure a smooth and safe transaction happens, the following team members will be required :
A complicated process of the sale is the accounting. An accountant will be able to help with this aspect of the sale.
The legal aspect is something we usually do not specialise in. A Solicitor will be able to help with this legal side of the business.
If the business is not being bought in cash, a banker or financer will be required in negotiations.
A tax advisor is recommended for advice on sale tax matters.
Find out the value of your business
The valuation of the business is extremely important. A valuation must be realistic as ultimately this is what the buyer will be paying for your business for sale.
NET ASSETS + GOODWILL = SALE PRICE.
E.g. Net assets in balance sheet £100,000 + Goodwill £200,000 = Sale price £300,000
Net assets can be found in the balance sheet.
Fixtures and fittings include:
- Tv equipment
Plant and equipment include:
Stock includes the valuation of stock
The level of profitability is a key factor in determining the goodwill element. If you consider your revenue in the goodwill, this tends to be just vanity. For the goodwill - profitability matters most.
4. Preparations made by yourself
Get documents and assets ready
There are a few areas in which a business will need to prepare for a sale. What exactly is required will vary from business to business and the sector operated in. We recommend you to create a checklist of the following:
Accounts With your accountant, ensure all accounts are fully prepared and up to date.
Asset disposal For any assets no longer needed, dispose of this so that the buyer is provided with assets that are important to the business.
Account archive Having a minimum of 3-years of annual accounts available will give credibility to your business sale.
Assets list A list of all assets with a valuation to each asset (use Microsoft Excel to produce a spreadsheet with the help of an accountant).
Banking Bank accounts, bank addresses, bank contacts, statements, etc.
Commercial agreements Copies of any commercial agreements such as a: - Supplier agreements - Maintenance agreements
Employee information List contracts and package information (e.g. pensions) included in the employee contracts.
Insurance policies Include any details of active insurance policies including the insurer’s benefits and terms dates.
Intellectual property rights Details of copyrights, patents, registered designs, and trademarks should definitely be included in the sale of the business and stated in the sale.
License information Such as software use and waste information and waste disposal.
Limited company formation Companies house documents such as a certificate of formation, memorandum of association. Name & address information - shareholders, members, directors, and company secretary.
Property documentation Rent information, rates, copies of leases or freehold ownership.
Reasons for the sale/profit Develop acceptable reasons for the sale of the business and the increase/decrease of profits. Buyers will want to know.
5. Marketing and Selling Points
It's time to find your buyer in the fastest and most cost-effective way.
Once all stages are complete (steps 1, 2, 3 and 4), its time to market your business for sale on the UK’s Largest Business For Sale. It is important to get the best coverage for your advert while using a cost-effective package to sell your business for sale. Selling with Rightbiz comes with the greatest benefits:
- Expert Selling Support from Rightbiz Selling Team
When describing your business for sale on a Rightbiz advert, use the most powerful selling points:
Customer base Describe your steady income, coming from repeat customers.
Existing interest Showing that you have an existing interest will give buyers the impression that this business will sell relatively quickly.
High Potential Describing the full potential of the business is important. Giving the buyer ideas on where to take the business next.
Exclusivity Describe the exclusivity of the business’ features. Describe what features this business has that other competitors do not.
Trading history Explain the history of this business to give the buyer an idea of what the business can achieve.
Extensive information Display great photos and extensive information on what is included in the sale of the business.
6. Finding the ideal buyer and selling
Sell to the right person
Qualifiying potential buyers - Once your advert is on the market and is live on Rightbiz, sit back and let Rightbiz do the rest of the hard work. Now its time to guide you in finding your ideal buyer. There is no point selling to a buyer who cannot finish the sale with you. So qualifying potential buyers is very important so that time and fees are not wasted.
Confirm timescales of the sale It's important to confirm with the buyer the timescales for completion of the sale.
Previous experience It's a positive if a buyer has previous experience of the business.
Reasons for buying Understanding the buyer’s reasons for buying the business can add confidence.
Verifying available finance Easily avoid a lot of wasted and legal fees by first verifying if the buyer has appropriate funds to buy the business from you.
7. Negotiate and Sold!
Terms and negotiations - once you have qualified the buyer and are happy to sell to them, it’s now time to get into the nitty-gritty, and negotiate the terms, here are some factors to consider:
Financing The transition of the business is not over once the terms have been agreed to. It’s about how quickly payments are received:
Cash upfront - this is the best and maximises the benefit of the deal for the seller and has the least complications.
Staged payments - You can set up staged payments with the buyer and your solicitor.
Legal aspect of the sale Ensure with your solicitor that all terms of the sale are legally binding and in writing.
It’s ok to walk away! If the buyer cannot agree to the terms, always remember that another deal will come through so don’t rush!
Sale price The sale price will largely, reflect how successful a sale is.
Rightbiz wishes you an amazing smoothe selling process!
This entire all-in-one guide was designed to help you guys sell your business in the fastest and safest way. If you’ve read through this guide, and haven’t listed your advert. Once you’re ready, get your adverts listed immediately through Rightbiz to find your ideal buyer.
Learn more about the UK's Largest Business Marketplace
With unwanted fees, complicated contracts, and unnecessary commissions from agents, Rightbiz was born in 2006 to offer business owners a fast but powerful way of selling their business. Rightbiz has come to offer simple yet powerful tools - bundled in the most cost effective package. On top of that, our trusted teams eagerly work with sellers to overcome the biggest problems in selling a business, all in-order to get connected to the ideal buyer they’re looking for.
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