How To Sell A Business

/ Tax

Author: Henry Ejdelbaum

Tags: bonus politics

All sorts of circumstances can prompt the sale of a business, from retirement or a wish to concentrate on other interests to a desire to take the company to a new level unattainable without external help and funding. Whatever the reason for the sale, preparation beforehand will make the transaction smoother and ensure that everyone gets the best possible deal.

If at all possible, start to make preparations at least a year before you plan to sell. This will enable you to get your business ready for a sale, and make it easy to set things in motion when the time is right to sell. By watching the market over this period, and keeping an eye on competitors in the same arena, it is possible to get a feel for the value of your business, how to increase its value, and even when to sell.

It is usually a good idea to enlist the services of a professional adviser to help you prepare your business for sale, assess its value, and assist you in finding a buyer.

Valuing a business is a difficult task, and two advisers might come up with two completely different assessments of your business’s worth. Ultimately, a business, like any other asset, is only worth what someone is willing to pay for it. However, it’s important to have all the facts at your disposal so that you can present them to potential buyers.

Value may be measured in the business’s earnings, cashflow or turnover, or, in the case of a business that will be liquidated after the sale, its assets. The business’s potential for future growth and profit is also important. During the period preceding the sale, some business owners concentrate on short term profits to up the company’s value, while others prefer to keep their focus on the longer term. Your decision may depend on how personally involved you have been with the company, and how much interest you have in how it fares after it changes ownership.

If you have been actively involved in running the business, it is important to train a successor or a team to take over. This will reassure potential buyers that things will continue to run smoothly after you leave. Make sure both you and the buyer are aware of any intangibles that will not be transferred to the new management, for instance specialist knowledge or contacts.

Employees can be a very important asset, so make sure they are kept abreast of what is going on and made aware in good time of any potential redundancies or relocation. It is good news for the buyer if the majority of employees are happy to stay with the company under new ownership.

An adviser can also help you know your legal position and ensure that all the business’s affairs are in order and all loose ends tied up. Make sure tax affairs are up to date and all the paperwork is available.

All that remains is to find a buyer. This can be done through an adviser, again, or through a specialist website. The best way, however, can often be through networking. Who better to take over your company than a trusted business or personal contact?

This article was contributed by, the market-leading directory of business opportunities from Dynamis, the online media group also behind and

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