How to sell a business

There are many aspects to successfully selling a business. Below are a few pointers that you can use as a guide.


Clean Financial Records:

A buyer will engage several professional advisors, including an accountant, solicitor and financial advisor. During the sale they will insist on seeing all relevant information pertaining to the business. Ensure that all your financial records are up to date and clearly demonstrate the true profitability of your business to a potential buyer.

Comprehensive documentation:

Document any relationships which are key to your business. Convert any verbal agreements with clients and suppliers into written agreements where possible. Written agreements make your business stronger and it builds confidence in potential buyers. Examine existing contracts with clients and suppliers to ensure they will not need renegotiation or will expire as a new owner steps in.

Keep stock levels under control:

Most buyers don’t want a business with high working capital requirements, so keep stock levels to a minimum and reduce the amount owing to creditor’s as much as possible. Don’t let your debtors blow out. Collect all overdue payments from your clients. A buyer will base all their cashflow and working capital projections on your debtor and stock levels. There is some concern for a potential buyer if your customers are taking a long time to pay their accounts.

Lease Agreements:

If there is a short period remaining on your lease, it is a good idea to approach your landlord to find out whether the landlord is going to renew the lease after the expiry date. It is advised to make sure that long tenure periods with further options are in place. Banks will not finance businesses that do not have a secure lease.

Plant & Equipment:

Ensure that all plant and equipment is in good working order. Note on your plant and equipment list, Make, Model and Serial number. Leased equipment should have payment amounts and payout amounts and the name of the company. Any loan equipment should be noted.

Clean up for inspections:

A thorough clean-up of the premises and equipment is essential. First impressions can make the difference between a sale and no sale at all. The appearance of a premise can be a reflection of the business itself. Offload any surplus equipment. Any equipment that needs fixing needs to be in good order when an inspection takes place. Don’t have inoperative or unsafe machinery. Remember our comments on the state and condition of your premises and equipment is drawn from many years of experience and knowledge of buyers requirements.

Presentation of a business is  a major factor  to impressing a potential buyer. Putting in the time to prepare the business for sale will be rewarded with a better chance of a prompt sale.