Selling your business: The guide to making a grand exit

Selling your business is usually a one-off event. Here are a few tips on making sure you get it right.

Your accountant is unlikely to be your first port of call when looking for help with selling your business, however at CBHC we have considerable expertise in this type of transaction and can help you prepare and market your business to get the best deal.

If your long term objective is to sell your business, then you need to begin optimising its attractiveness to investors and potential value as soon as possible. The way your business is structured will make a significant difference to the sale, for example, if success depends upon your personal involvement then your buyer may want to retain your skills as part of the deal. Regardless of what stage your business is at, if eventual sale is your goal, you should talk to us about how to maximise your chances of a profitable transaction.

Get the paperwork in order

Once the time has come to sell, you will need to create a Sales Information Memorandum. This is a document that effectively gives any potential buyer all the information they require to make an informed decision. It will include details of:

The Sales Information Memorandum is effectively a business plan and demonstrates the benefits of buying the company. It also provides evidence to support the Business Valuation.

Make sure the price is right

Valuing a business requires an in-depth understanding of the company being sold, the market in which it operates and its growth potential. At CBHC we have access to leading edge software which provides information on every published corporate finance deal in the world, as well as industry leading market research. We use this data, combined with a detailed analysis of the profit and loss, balance sheet,business forecast and goodwill valuation to arrive at a realistic figure.

Axe the tax

The next step is to examine the tax implications as they can mean the difference between a deal being viable or not. It’s important that the deal is structured in the most tax efficient way so you should consult a specialist advisor.

Go to market

When it comes to marketing, it isn’t usually a good idea to make a public announcement – that just creates uncertainty. Instead, contact potential purchasers discreetly or get a corporate finance adviser to do this for you. Knowing which companies and individuals best understand your industry and type of business will help ensure you receive genuine offers and achieve a good price. This is an area we can help with as we have access to a network of investors, as well as information on every company in the UK and Northern Ireland. This enables us to create specific and relevant target listings, and we can then approach potential purchasers, in confidence, on your behalf.

Agree terms and complete

This can be the most stressful stage of selling a business – after so much time and energy has been poured into making a venture work it can be difficult to step back and put a price on it. For this reason we recommend that both parties use third parties to negotiate issues such as price, exit terms, staff retention and profitability targets. It’s also necessary to use third parties to manage due diligence and this is another area we can help with.

Life after the exit

You set up your business for reasons both personal and financial. So when you sell it, consider both again. Whether you’re planning to head out to the golf course or even start another venture, talk to us about how to make sure your hard earned profit continues to grow.

For more information and advice on developing an effective business plan, please contact our Corporate Finance Team.