Before the sale process begins it is essential to take a long, hard look at all aspects of your business. Preparing the business for sale is often overlooked by many business owners, yet by putting in some effort in advance increases your chances of selling the business efficiently and for a much higher consideration. This preparation includes ensuring prices and margins are optimised and discretionary expenses reviewed to ensure that it is critical to the immediate and short-term objectives of the company. Non-core activities and assets should be closed or disposed of and all financial information should be clear, accurate and up to date. Look at your existing management structure, a purchaser may not necessarily want to have to draft in a new management team, so ensure your second line management are capable of taking executive decisions.
Additionally, the following should be completed or at least be considered to help increase the appeal of your business:
- Update your sales material & website
- Provide financial statements; management accounts & tax returns for the last 3 years
- Identify non-recurring or one off income and costs
- Consider what differentiates you from your competitors
- Provide budget & cashflow information
- Ensure legal documentation, e.g employment contracts, terms of business, supplier contracts are upto date