Ready to Sell your Business? Preparation is the Key.
Ready to sell your business? Preparation is the key.
Our business services team have put together a checklist for anyone thinking of selling their business or bringing an investor on board. Selling a business is like selling any other major asset, such as your house: you need to make it as attractive as possible to potential buyers, and to show that there is room for further expansion. Many businesses do not sell when they’re first taken to the market, or receive lowball offers. This is because they’re simply not ready: our checklist aims to help you get as market-ready as possible and maximise your return.
Q1. What information about my business will the buyer want to know?
You know every inch of your business. Communicating that to a potential buyer (and their advisers) is a key part of the sales process. You’ll need to show them:
- Up to date accounts and tax documentation
- Title to assets / rights to sell or supply goods
- Details of key supply contracts and customer lists, insurance policies, leases
- Intellectual property details (trade marks, copyrights, invention, know how)
Q2. How do I manage the rights of my employees when selling my business?
The contracts of your employees are automatically transferred to the buyer together with all rights and liabilities. We always get input from our specialist employment team to ensure compliance.
Q3. How do I value my business, including its intellectual property (IP)?
What your business might be valued at, and the price someone is willing to pay, may be two quite different things When it comes to valuing business assets like stock, a simple course of action is for buyer and seller to agree on an expert valuer to complete an independent valuation. And don't forget possible intangible assets such as brands and know-how. If it is not shown on your balance sheet, why should a buyer want to pay a premium for IP? IP assets can generate exponential returns. Identify, value and take account of your IP assets now: they can add significant value.
Q4. Am I still liable under my business contracts with third parties after sale?
It depends upon the agreement reached with your existing contracts. Generally the ideal solution for you, as seller, is to obtain the agreement of the third party to enter into a deed of novation, placing the buyer into your place as seller, as though the buyer has always been the original party. If this is not possible, there are other options to limit your future liability.
Q5. How will any property or leased assets in my business be treated?
Leased assets include any assets your business does not own e.g. subject to hire purchase or similar credit agreements. For the vast majority of leased assets, ending your liability under the credit agreements will be of priority to you to avoid the risk of the buyer at some point in the future defaulting on the terms of the contact, leaving you exposed. We can ensure certain terms are included in the sale agreement to limit this exposure.
Q6. What about tax?
This can be a minefield for sellers receiving money on a sale. Prior preparation and advice is key - for example an entrepreneur will in some cases be able to take gains on sale at tax rates as low as 10%.
The Battens difference There are lots of issues to consider when selling your business, but good preparation and planning will maximise your chances of getting a deal done at the right price.
We understand the practicalities of business life and try to keep things as straightforward as possible, whilst also ensuring you are fully legally protected.
We handle all company and commercial work from investments in companies, sales and acquisitions, financing, shareholder matters, to intellectual property including trademarks, and across a range of sectors and industries. For further information and advice please contact one of our team who will be delighted to help:
Brian Levine on 01935 846258 - Brian.firstname.lastname@example.org
Katherine Gilmour on 01935 846059 – Katherine.email@example.com