Thinking of selling your business?
A recent survey by Barclays and the Business Growth Fund highlighted that the number of start-ups emerging in the West Midlands region continues to grow, echoing a national trend.
However, whilst the focus in the media is often around business start-ups, due to the sheer number that are being launched all the time, there are many who are preparing a business for sale either to move onto something new or to retire.
There are some simple but vital steps that can be taken to aid this process, so we thought we’d provide the ultimate checklist.
Make sure accounts are up-to-date – a set of accounts that aren’t up to scratch won’t convince a potential buyer that the business is worth buying. It’s basic housekeeping, and evidence this hasn’t been done properly can cast a shadow over the rest of the business operations and could cause them to dig deeper.
Make management accounts available – any potential buyer will want to see regular comprehensive management accounts as a must. Get organised by outsourcing these to a financial director service in the months in the run up to sale, to ensure they meet the grade. NB Our Board Support solution offers this as part of the fixed fee on a range of high support services, removing the headache associated with business finance functions.
Get your answers straight – you will be asked lots of questions, not just by the buyer but their accountant as well. Ensure you prepare thoroughly for this by thinking about what you might want to know as a buyer. Your accountant can help you prepare, as they will know the questions that are likely to be asked.
Wipe the debt – make sure Crown debts are up to date, and all returns for VAT and PAYE have been made. Interest in a business with lingering debts will be minimal.
The devil is in the detail – Make sure you are able to produce details on:
- Bank facilities and terms of overdrafts
- Stock list and details
- Any assets under finance
- Bank loans
- Lease(s) for premises or other assets
- Key customer details
- Staff details, contracts of employment and length of service
- Details of any pension schemes
Resolve disputes – doing this before sale is vital, as no one wants to buy a business if there is uncertainty.
As well as the checklist above, it is advisable to seek professional help from your accountant to make the business as attractive as it can be for sale. Additionally, consider using a solicitor to prepare the legal documents that will be needed. A little time and money spent on preparation will reap rewards at the point of sale.