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Top 10 tips when selling your business

Deciding to sell your business is by no means an easy choice to make. Here are our top 10 tips for getting everything in order and preparing your business for sale.

1. Obtain a business valuation

One of the first things you should do is obtain a realistic idea of what your business is worth from an objective, outside source. A professional valuation will give you a basis for gauging offers from buyers and will give you an idea of what you can expect to achieve on a sale. It will also help you assess the market position of your business, the general financial and economic climate in your sector and the strengths and weaknesses (if any) which you can then, hopefully, correct prior to putting it on the market. Valuations can be obtained from a number of sources, ranging from local accounting firms to regional business brokers and investment banking firms. As a rule, you should make sure the company performing your valuation has access to the most current national data regarding privately held transactions in your sector. Experience in selling firms of your type if obviously essential.

2. Get your financials in order

Buyers evaluating your business generally require at least three years’ worth of financial information. The more formal your statements (account-reviewed or -prepared vs. internally generated statements), the better the impression you will make and the easier the financial due diligence for a buyer. Tax returns may suffice and VAT Returns will also help. It is also important to have up to date management accounts.

3. Understand the true profitability of your business

Most privately held businesses claim a variety of non-operational expenses. Make sure you have supporting documentation for these expenses. For example, your business may be paying for your personal car lease or computers and telephone expenses.

In addition, there may be infrequent expenses you have incurred during the past three years that should be excluded in a buyer’s analysis of recurring cash flow. There may be moving expenses if you have moved to a larger premises or unusual or one-off legal or accounting expenses.

4. Consult your financial advisor

It is wise to speak to your accountant or tax advisor with regards to planning your financial future. Understanding your personal and business tax situation may also help you recognise your options with regards to structuring the deal.

5. Make a good first impression

Will a buyer visiting your business for the first time see order or chaos? Buyers look for businesses that “show well”, because an orderly business is often indicative of an orderly management team and back-room operations.

6. Organise your legal paperwork

Review your businesses legal documents, partnership agreements, shareholder agreements, incorporation papers, permits, licensing agreements, leases, customer and vendor contracts, terms and conditions, website policies etc. Make sure you have them readily available, current and in order.

7. Consider management succession

If you are absolutely vital to your business, who will a buyer be able to turn to for help running the business after you leave? You should have a succession plan in place before going to market. This may extend to appointing a new managing director or incentivising the existing management team ahead of the sale.

8. Know your reason for selling

Buyers are always curious as to why a seller wants to exit a business (if it is so great, why are you selling?). Be prepared to articulate your reasons.

9. Get your advisory team in place

Our dedicated Corporate team at Bowling & Co are proficient and experienced in business sales of all shapes, sizes and sectors as well as mergers and acquisitions. You may need to also think about contacting your:-

  • Accountant;
  • Bank;
  • Selling Agents; and
  • Surveyors.

10. Keep your eye on the ball

Finally, do not let your business performance decline because you are too focused on the sale of your business. This will only give buyers additional negotiating power to lower their offers.

If you would like any more information in relation to this post then please feel free to contact me via email: or visit my profile.

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