How to get the best price for your business

When you’ve built a business, nurtured it and watched it grow, selling your enterprise might be far from your mind. But, at some point, you’ll probably want to sell up. Whatever the reason – retirement, ill-health or a life change, for instance - achieving the best price will be your ultimate aim.

The level of care and effort you put into the sales process will directly impact the sale price you realise. It will also influence how long the sale takes to complete.

How to prepare your business for sale

Often the process of selling a business starts a year or two before going on the market. From the outset, you’ll need to be clear about your objectives and understand the marketplace. You must allow time to prepare your business so that it is in top shape and ready to achieve the best possible selling price when you come to sell.

Seek professional help

Involving professional help with selling your business, including an experienced solicitor and accountant, is essential. Your advisers will direct you on how to prepare your business while freeing you up to continue with its day-to-day operation.

When you’re ready to sell, your advisers can provide a business valuation, strategically identify the best purchaser and advise you of the financial and tax implications.

Preparation is key

To get the best price for your business, you’ll need to do more than tweak the figures. You should take an objective and critical look at your business from every angle. A thorough scrutiny will identify ways to make it more efficient, profitable and attractive to potential buyers.

Areas to consider:

• Improve profits by identifying and eliminating excessive or unnecessary personal benefits and/or expenses.
• Increase your sales figures by ramping up your marketing.
• Ensure employment contracts are complete, up to date and ideally in electronic form.
• Lock in customers and suppliers by formalising deals with appropriate contracts.
• Put in an effective communications plan to keep staff, customers and suppliers up to date on proceedings.
• Reduce costs by avoiding big purchases preceding the sale.
• Ensure that your information systems are up-to-date and transparent.
• Remove uncertainties in respect of any disputes, claims and actions against or on behalf of the business.
• Put a tax-efficient structure in place to ensure the reduction of personal tax liabilities on disposal
• Tidy up the premises, so it looks its best when potential purchasers visit.

You’ll also need to consult – and if necessary, negotiate with – other shareholders and review the terms of any shareholders’ agreement.

With these steps complete, your business will be in the best shape for the open market and ready to achieve the best price.

If you’d like help preparing your business for sale, please get in touch.