The best tips on how to sell your business are the most obvious ones. However, if you’ve never sold a business before, the whole process can look very daunting from the outset.

Let’s say you wanted to buy a business – maybe a competitor’s business. In your mind, you’d have a checklist of things you absolutely wanted out of your acquisition. It’s exactly the same with anybody who would want to seriously put an offer in for your firm.

If you have come to the decision that it’s time for someone else to lead your company, we’ve prepared a list of the best tips to sell a business. To help you with many of the suggested tips in this article, please contact the Panthera team – this is something we have a lot of experience in and we’d love to be involved in it with you.

Be psychologically and emotionally ready to cut the cord

That company which you’ve given years and years of work, sweat, toil, tears, and cash to build will not belong to you anymore.

You won’t have a set of keys for your old premises. The new owners will rarely if ever ask for your opinion. The people you’ve worked with for years will not see you as their boss anymore.

One day, you’ll walk out the door and you’ll never come back.

If, after reading those three paragraphs, a smile has appeared on your face, you’re ready.

Start to plan on what you’ll do after you’ve left

Once you’ve sold the company, there’ll be a 40-50hr hole in your week and you’re going to want to fill it, unless this is a retirement sale.

Start planning right now. Your goal should be to build up a secondary or even a tertiary source of income to replace the income that will no longer come from your business.

Start getting your books in order

Get in touch with your Panthera accountant as soon as possible and ask him or her to prepare the following:

• last three years’ accounts

• cash flow spreadsheets

• how your company spends its money and what it spends it on

• a list with all the direct debits and standing orders that take money from your accountant regularly

Also, ask him or her to send you a bookkeeper for an hour or two each month so that your finances are always up to date.

Appoint a business transfer agent

It is possible to sell a business yourself, but it’s not advisable if yours is a complex business or you have a turnover of £500,000 or more.

A good business broker with lots of deals behind them and many years of successful experience knows how to market your business. The goal is to create a competitive bidding environment within a short space of time where potential buyers increase the amount of money that they’re willing to pay for your company.

This is done in a number of different ways. To encourage competition, your broker should market your business to the following types of buyer direct:

• their own database of registered UK and overseas business buyers whose records detail their available funds and their purchasing preferences

• competitors locally and nationally who, through financial profiling, have the means and the motive to want to buy your company

• via a network of aligned accountants and solicitors all of which keep their own databases of individuals and companies looking to acquire

At all times, the fact that your business is up for sale should be kept confidential.

An intense period of marketing should start to yield results within 4-6 weeks if there is sufficient interest in your proposition.

Start documenting everything to do with your business

Make sure that you find all the agreements to which your company has signed up – finance leases, loans, merchant services accounts, accountants’ bills, website providers, telecoms companies, utilities, commercial property leases, and so on.

Make a list of all the staff that have worked for you in the last few years together with the length of time served, start dates, end dates (if applicable), salary, commissions, and disciplinary procedures.

Keep all of this is a safe and easily accessible place together with every other bit of company documentation you can find. You’re going to need this later.

Have a solicitor on stand-by

You will, more likely than not, end up speaking with a number of different potential purchasers over the phone. Some will want to meet you. During this period, a good broker should be in the background coordinating everyone towards a specific point in time when offers will be tabled and a bidding process will begin.

At this point, it’s best to contact a local commercial solicitor to let them know that your company is on the verge of having offers made for it.

Once an offer acceptable to you has been made, both parties will normally meet with their solicitors and with one of our team representing you. Be as candid and open with your solicitors about what you want from each potential purchaser.

You should start negotiating with the buyer to establish firm interest and the tabling of a generous offer. Once a deal has been agreed, your solicitors and your buyer’s solicitors will prepare a “Heads of Terms” agreement outlining the basics of the deal. The heads of terms are guide rails for the rest of the process up until the point of completion (the day you actually sell the company).

Be prepared to work very long hours once an offer has been accepted

Due diligence takes a long time. Be ready to do a lot of overtime and to be pulled away from other tasks to complete what your buyer’s solicitors have sent you.

There are always some differences between the Heads of Terms and the Sale and Purchase Agreement (that’s the document you and your buyer sign to transfer ownership of the business). Your buyer’s solicitors will attempt you to give concessions. Take advice from your solicitors about every concession you’re asked for.

Don’t count your chickens until they’ve hatched

A deal is not a deal until the money is in your bank. Things can go wrong at the very last minute, so you’ll need to keep your wits about you in the final few days before the signing ceremony.

Help your new owner and then go out and enjoy yourself

On the day of completion when ownership is transferred, allow yourself to relax for a few hours.

Then, work as hard as you can for the buyer so that the ownership transfer is smooth for customers, staff, and suppliers. If part of your payment is deferred, your buyer may be relying on the smooth and profitable running of your old business to transfer money over to you in full and on time.

Work with Panthera to sell your business

Selling your business is difficult and time-consuming. However please take it from us that the owners we’ve worked with whose companies now belong to someone else say that selling up is the best thing they’ve ever done.

To prepare your company for market, please call Panthera Accounting on 01235 768 561 or email enquiries@pantheraaccounting.com.