Blog

TIPS FOR SELLING YOUR BUSINESS

Business owners have many diverse reasons for selling their business, from the desire to reaslise the cash of their asset, retirement, or simply to exit a market in recession. Here are some top tips to maximise your selling price and to ensure your business is sold in the right market conditions.

Ensure your timing is right

Selling a business for reasons of ill health or challenging economic conditions cause the seller huge problems, typically because these reasons are known to the prospecive buyer who can use these as a bargaining tool to negotiate downwards the selling price. A better time to sell is when the business is robust and profitable.

Value your business correctly

This is a common mistake that business owners frequently make where they overvalue or in some cases undervalue their business. This has the consequence that the true market price isn't realised and can make it more difficult to achieve a sale. There are a number of business valuation methods that you should consider in advertising your business for sale, not all of which are appropriate depending on the nature and size of your business. However, it is important to bear in mind that the true value of your business is the price that a buyer is actually willing to pay for it.

Clearly define the business for sale

Some businesses operate as limited companies and it is clear that the business for sale is the company and it's assets. However, it is not always so straightforward. If your operate an online business, the sale and indeed the only asset may be the website and/or the domain. Similarly, sole traders who trade under their own name may have different assets and do not have the benefit of limited liability. A business owner should be clear as to the exact nature of the sale of the business, the assets included and excluded in the sale. Intangible factors such as goodwill can often be part of business sales.

Get a professional on board

It is unlikely that a business owner can achieve the best selling price or make the right business sale without the professional help of an accountant and a solicitor. You need an accountant to ensure the books of the business are prepared properly and in a legible fashion as potential buyers will need to see the financial state of the business. A solicitor is needed to draft the paperwork for the transfer of the business, and the sale contract and to advise on legal matters generally.

Regulate your business

It is key to a successful business sale that the seller ensures that all outstanding taxes and charges are settled and that the accounts of the business are up to date. This not only promotes confidence that the business has been well run, but also will prevent any hitches in the sale of the business as any irregularities will become apparent during the due diligence process.

ukbizsales, Oakmount Drive, Belfast BT 15 3RE, Northern Ireland

Telephone: 028 95810766