Getting your business ready for sale and exit
How to get the best value from your sale?
Getting your business ready for exit and sale can seem a daunting and difficult process. Getting best value from the sale, protecting your personal and commercial assets, and ensuring continued success for something you may have nurtured for many years, are all important considerations.
It is essential, therefore, to be proactive and to put measures in place early on with sound advice.
Michael Sandys, Vincents Solicitors’ head of corporate and commercial, outlines five key points for owners to prepare a business for sale.
- Review your contracts – these relate to different parties contracting with the business such as suppliers, customers, and employees. Having these reviewed and up to date will ensure you are in the strongest position when it comes to selling your business. Any prospective buyer will want the business contracts to be legally binding and enforceable to ensure that the business will continue to be successful following the sale.
- Deal with financials – make sure all your financial records are up to date and accurately reflect the position of the business. This will help to receive the best value possible from any prospective buyers. Part of this means making sure that all securities, liabilities, charges, and any personal guarantees are discharged or accounted for in the business. You would not want to remain a personal guarantor for a business in which you are no longer involved!
- Consider your intellectual property (IP) – check any IP used by the business, such as trademarks or patents, are sufficiently protected with, for example, the Intellectual Property Office (IPO). These will add value to the business as any potential buyer will be reassured that the IP is safeguarded and can be used by the business going forward.
- Addressing business property – you need to consider the business property when selling your business, depending on whether you own or lease the property.
- If you own the property, you’ll need to decide whether you are selling this with the business, or whether you prefer to lease the property to the prospective buyer.
- If you lease the premises, you must ensure the lease agreement is up to date; understand whether the lease can be assigned to any prospective buyer; have a clear idea of your dilapidations liabilities; and be aware of the terms of your break clause if required.
- Get your team ready – it is best to take appropriate advice from your professional team, primarily your accountant and solicitor. Your solicitor will be able to review all of the above documents with you to ensure they are up to date and provide you with the best of success.
By doing all of this, you can make sure that you are well prepared for the process, and everything is best placed to go through successfully.
For support with selling your business contact Michael Sandys at Vincents Solicitors on 01772 280 329 or email MichaelSandys@vslaw.co.uk