Selling your business

At Rus­sell & Rus­sell we can advise busi­ness­es in the Lanark­shire area on busi­ness exit strate­gies and sell­ing a busi­ness. Here are some of the essen­tial points to con­sid­er…

Sell­ing your busi­ness may be the time when you final­ly get to reap the rewards of a life­time of work. Or it might be the oppor­tu­ni­ty to cash in when the con­di­tions are right, before you start your next enter­prise.

Either way, the sale of your busi­ness will be one of the most impor­tant things you’ll ever do. You only get to do it once, and if you get it right, the finan­cial gains can be con­sid­er­able.

Here are some of the most impor­tant issues you will have to con­sid­er:

1. Timing the sale

When is the right time to sell? In an ide­al world, you would sell when the mar­ket is boom­ing and before any antic­i­pat­ed down­turn. But inter­nal fac­tors are just as impor­tant. If your busi­ness is per­form­ing well, per­haps at the peak of a pric­ing cycle, it will be more attrac­tive to poten­tial buy­ers.

Above all, if you have any choice in the mat­ter, sell when you want to, not when you have to.

2. Preparing your business for sale

You will need to have up-to-date infor­ma­tion avail­able for inspec­tion by poten­tial buy­ers. This will include busi­ness plans and bud­gets, as well as finan­cial doc­u­ments such as prof­it and loss state­ments, tax returns, loans against the busi­ness and the lease.

There are a num­ber of things you can do in order to make your busi­ness more attrac­tive to poten­tial buy­ers and there­fore com­mand the best pos­si­ble price. These might include:

• Increas­ing sales fig­ures — per­haps through stronger adver­tis­ing or offer­ing spe­cial deals
• Improv­ing your assets — you might want to sell off any unpro­duc­tive assets, and replace any machin­ery reach­ing the end of its use­ful life. Now might also be the time to buy any com­pa­ny assets you want to keep after the sale, such as a com­pa­ny car
• Reduc­ing lia­bil­i­ties — if you can clear up any pend­ing legal dis­putes or oth­er lia­bil­i­ties before the sale, there will poten­tial­ly be few­er obsta­cles to put a buy­er off
• For­mal­is­ing con­tracts — put into writ­ing any deals you have with sup­pli­ers, and con­tracts with employ­ees
• Smarten­ing up — make an effort to improve the appear­ance of every­thing in the busi­ness, from the premis­es to the paper­work.

3. Setting a price

Over­valu­ing the busi­ness will dis­cour­age buy­ers. We can help you to val­ue your busi­ness accu­rate­ly. A good way to ensure a high price is to cre­ate com­pe­ti­tion between poten­tial buy­ers. You can reject any bids that fail to reach your esti­mat­ed val­ue, oblig­ing oth­er bid­ders to increase their offers.

4. Making the sale

Before sell­ing, you should con­sult us, as well as your solic­i­tor and inde­pen­dent finan­cial advi­sor. It may also be advis­able to employ Busi­ness Trans­fer Agents who spe­cialise in buy­ing and sell­ing busi­ness­es. In many cas­es, sell­ers find it nec­es­sary to finance at least some of the price — that is, lend­ing to the buy­er to facil­i­tate the pur­chase.

5. After the sale

Once you know the val­ue of the busi­ness you need to deter­mine how the funds released by the sale can best be used to pro­vide you with a com­fort­able retire­ment or to begin a new busi­ness ven­ture. Valu­able tax reliefs are at stake here, so con­sult us ear­ly in your plan­ning to avoid an unnec­es­sary tax bill.

With prop­er plan­ning and good advice, you can ensure that you get the price and terms that sat­is­fy your rea­sons for sell­ing your busi­ness. We can help you make the right deci­sions.

If you are in the Lanark­shire area and are look­ing for pro­fes­sion­al advice on busi­ness exit plan­ning, includ­ing sell­ing a busi­ness, con­tact Rus­sell & Rus­sell.