The journey to selling your business requires a period of preparation to ensure that your shopfront can be presented in the best possible light to prospective buyers, maximising your chances of a quick sale and achieving a competitive sale price. Depending on the size, sector and financial performance of a business, it could take months to prepare a business for sale.
The preparation stage consists of appointing a skilled business transfer agent, compiling the relevant financial documents and conducting a business valuation. By determining the worth of your business, this gives you an accurate starting point for a sale price. Here’s our business preparation checklist to guide you through each step of the business sale and valuation process.
Appoint skilled business transfer agent
If you’re wondering how to sell a business, the first step on your business preparation checklist is to appoint a skilled business transfer agent with a strong history of orchestrating business sales in your dedicated industry. The individual challenges faced by your business will be sector dependent and some trade associations may require you to abide by a strict code of practice when selling your business. Ensure that your agent is an industry expert as each approach will vary depending on the sector, business size and target buyer.
At Selling My Business, we offer a free business valuation service, alongside sourcing a genuine buyer for your business. When selecting an agent, compare the services on offer to help you make a cost-efficient decision. The background and reputation of the business sales team should also be a key determiner as this will influence the service quality and the level of exposure given to your business.
Avoid upfront fee payment agreements
We never ask for upfront payments we would highly advise businesses to avoid agents with this fee requirement. We are confident that we can source a genuine buyer for your business by using our results-proven advertising strategy which is why we will never demand an advance payment, unlike other business transfer agents. The Selling My Business team have over 100 years’ collective experience in the business transfer trade and links with over 10,000 actively searching buyers.
First impressions matter: Declutter, dispose and organise
After appointing a business transfer agent and typically as part of the service, they will carry out a business appraisal to assess the value of your business. Following on from this stage, you will be guided through each step, including the business valuation process to prepare your business for sale. At Selling My Business, we typically begin the process by requesting 3 years’ worth of historic/recent accounts, allowing us to assess profit and loss, gross profit margin and overheads. Our valuation process is in-depth and carried out by our in-house valuation team to generate an accurate figure, without the risk of underestimation or overestimation.
To prepare your business for sale, it is vital to ensure that financial reports are in order, stock and inventory is well recorded and if you own business premises, this is well presented and ready to be viewed by prospective buyers. An aesthetically pleasing business is just as important as maintaining a strong, internal management structure as this gives an impression of a well-managed business.
Streamline financial management systems
Credit control - If your business is on strong footing, this is typically reflected by the tight credit control measures in place to reduce the risk of late payment and bad debt.
Streamline systems - If you are using multiple software providers to achieve a similar result, unify this with one provider to streamline your facilities and costs.
Review contracts, agreements and licenses- If your business maintains licenses, trademarks and patents, ensure that this is up to date to maintain asset value. Review supplier contracts to ensure that the terms and conditions are up to date, including any verbal amendments so this can be carried through to a new owner. Ensure that all employee contracts are up to date to protect the business from a legal perspective and employees from the transfer in ownership.
How do I calculate the value of my business?
If you’re wondering how much to sell your business for, the first step is to calculate the worth to ensure that you list your business for a price reflecting this. A business valuation will assess key areas of your business to determine the monetary value, helping you establish an asking price when entering into negotiations with a prospective buyer. A business appraisal will consist of analysing company profit, turnover, liabilities and assets, painting a full picture of the financial health of the business and asset value.
A specialist business transfer agent can help you navigate the sale process, matching you with an appropriate buyer. Using a skilled expert can mean access to industry knowledge, step-by-step guidance and first-hand insight into the challenges regularly faced by buyers. By establishing the value of your business, you can identify where it sits on the market and how it measures up against similar businesses. Preparation is the key as your business should be refined and fine-tuned before hitting the market. A business in need of less damage control and maintenance will entice a buyer over a poorly managed, unprepared business.
It is instrumental to carefully compare the services on offer from multiple business transfer agents, the extent of the services on offer and previous business sales in your sector. At Selling My Business, we have over 60 years’ experience in the business valuation and transfer trade and offer a free business valuation service on a no upfront fee basis. We have an outstanding track record of successfully selling over 12,000 businesses from a multitude of industries. If you are interested in valuing or selling your business, contact a member of the Selling My Business team.