Preparing your business for Sale
Whatever the reasons are for selling your business, there are a number of things you will need to think about and plan ahead.
At FSM Solicitors, we have guided many business owners through the process of selling their business, achieving a sale at the right price and in a suitable timescale.
Some useful tips to consider
Here are some tips if you are thinking of selling your business:
• Prepare your business well in advance
• Offer well recorded and stable financial records
• Maintain tight credit control
• Avoid unnecessary debts
• Keep all assets in good condition
• Dispose of surplus equipment
• Reduce business risk
• Ensure formal contracts exist with suppliers and customers
• Keep terms of business up to date
• Retain key employees with appropriate employee incentives
Restructure your business if necessary
There are a number of ways to restructure your business to increase the total valuation and attract a buyer.
We can help you identify the most commercially-viable and tax-efficient structure and guide you through the potential pitfalls.
The structure of your sale
Here are three possibilities for you to structure the sale of your business:
1. Management buy-out
2. Joint venture which may require your continued involvement
3. For additional funding you could issue additional shares
Ensure all shareholders agree on the sale
You will need sufficient agreement from the majority of shareholders of your business.
Its worthwhile checking the shareholders agreement to ensure dissenting minority shareholders won’t create a problem.
Marketing your business for sale
To protect your business before the sale is complete, be careful not to let any trade secrets fall into the wrong hands and in particular to your competitors.
It’s usual to have confidentiality and non-disclosure agreements in place before sales activities commence.
Having an experienced negotiator on your side and having a clear understanding of your key objectives will help you to achieve the right sale at the best price.
If you would like to discuss your own particular circumstances with Nick Guinness our Company and Commercial specialist lawyer at FSM Solicitors, you will find his contact details below:
Partner, Company and Commercial
Tel: 01225 755621