How To Sell My Business in 14 Steps

Why Sell Your Business?

Multiple factors may lead you to the sale of your business: is now the time to retire? Should you pursue a new opportunity? Would your business benefit from a partner who can provide additional resources?

No matter the reason, it is wise to have a growth or exit strategy in place, allowing you to manage expectations as you look to evolve your business.

14 Steps To Sell A Business

1. Set your objectives

Before pursuing a sale, you need to identify your objectives to manage your expectations during the sale.

Selling your business may allow you to consider several exit options, so it is important to bear in mind your initial end goal.

Your desired outcome may account for the value of your business, what it means for your current workforce, and what will be expected of you following the completion of the sale.

2. Organise your documents

A business sale is a comprehensive process in which your company will be scrutinised. Preparing the necessary documentation that allows buyers to conduct due diligence will streamline the deal. Key materials to prepare include:

• Financial accounts highlighting the business’s performance over the past three to five years
• Projections demonstrating the company’s growth trajectory
• A detailed asset inventory
• Key contracts with suppliers and clients
• Information about premises, such as ownership and leasing documentation

Your company accountant will have the knowledge and experience required to assist you in the preparation of these materials and keep them organised for quick access during the sale.

3. Timing your sale

It is never too early to start thinking about selling your business, but patience will be rewarded.

KBS Corporate has an extensive understanding of current business sales activity, recognising when you would be well placed to achieve a high sales multiple and maximise your profits.

Ensuring everything is in order before heading to the market is a critical step, so do not hesitate to get in touch with us if you would like to get a sale in motion – making sure you are ready for when the market is in your favour.

4. Research tax implications

Tax implications have to be considered when selling your business. If you sell a business for profit, you are required to pay Capital Gains Tax (CGT) on anything above your tax-free allowance.

However, tax reliefs are available. These include Business Asset Disposal Relief (BADR), which enables you to reduce tax when selling your  business. If your company is eligible, BADR can reduce the rate of CGT by 10%. KBS Corporate’s sister company, K3 Tax Advisory, is at your disposal to identify any and all ways to minimise your tax implications during a business sale.

5. Get a business valuation

Before selling your business, it would be wise to know how much it is worth. Working with a business valuation expert enables you to set your expectations.

The value of a business is determined by multiple factors and considers your assets, cash flow, workforce, reputation and even external influences such as current market conditions.

KBS Corporate typically works on an offers-invited basis, allowing buyers to present their suggested values and ensuring you are in a position of strength to negotiate the right deal.

6. Prepare a sales brochure

The most effective way to promote the sale of your business is by highlighting its strength in dedicated marketing literature.

Being able to effectively communicate your business’s strengths in a concise, easy-to-navigate brochure will interest a larger pool of potential buyers.

KBS Corporate employs a dedicated team of document writers to produce engaging marketing materials, utilising our vast experience in the business sales market to showcase the key factors of your company.

7. Due diligence

Once you have accepted an offer for your business, you will go through the formal process of legal checks and due diligence.

This is a comprehensive process that allows buyers to confirm the assumptions they have made about the financial and operational standing of your company.

To facilitate a smooth process, ensure all liabilities are paid off or disclosed and be prepared to share the necessary financial documents that confirm the business’s status. Buyers will also look to review assets, contracts, any intellectual property the business holds and your company’s insurance policies.

8. Attracting the right buyers

Your chances of finding the right buyer or investor can be subject to the reach of your opportunity. Over the course of 25 years, KBS Corporate has established an extensive buyer network to offer small business owners various options when pursuing a sale.

We scrutinise all potential buyers, establishing their funding status and industry experience to understand if they have the resources and capital to satisfy your exit plans.

9. Consider experienced business sales advisers

While many of the steps in a business sale demand time and determination, it is not a process you need to manage as an individual.

Hiring reliable business sales advisers can support all aspects of the deal, allowing you to benefit from the competitive M&A landscape while maintaining complete discretion.

KBS Corporate’s bespoke, tailored service will aid you through negotiations and due diligence, optimising the potential value of your business.

10. Negotiate the price

You do not need to accept the first satisfactory offer you receive. The negotiation process is expected by buyers and, through regular communication, you can identify their priorities, potential synergies and financial capacity.

When negotiating a deal, you will be protected by confidentiality agreements so there is no need to rush. KBS Corporate will work with you to fully evaluate offers and suggest improvements.

11. Agreeing to the terms of the sale

Once you have accepted an offer, you will agree to the terms of the sale – commonly known as Heads of Terms (HOTs). The HOTs is a complete document that details, in writing, the key elements of the deal, breaking down ownership transfer.

While KBS Corporate will support you through this, many business owners work in conjunction with their solicitor for legal advice, ensuring the terms of the deal are satisfactory.

12. Completing the sale

Following due diligence, you will finalise the Share Purchase Agreement (SPA) and complete the sale of your business. Solicitors will be the principal leaders of this stage in the process, and KBS Corporate has established a dedicated legal panel to ensure you have access to the expertise you need.

During this legal process, there will be a final review of all documentation relevant to the sale, including purchase agreements, indemnities and warranties, asset transfer and non-compete agreements.

Once satisfied, your solicitor will confirm that the sale can proceed and ownership of shares will officially transfer.

13. Informing your staff

Typically, small business owners wait until a sale has been completed before informing their staff of an ownership change.

Once you have transferred ownership of shares, staff will be informed of upcoming changes. As per the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), all employees are entitled to the same terms and conditions as they had before the sale.

Should the new owners look to make significant changes to the current personnel structure, it is important to follow a fair redundancy consultation process and make eligible redundancy payments.

14. Inform HMRC 

And last, but by no means least, you are required to inform HMRC about the sale of your business.

Your method of communicating the sale to HMRC will depend on the standing of your business and whether you are a sole trader, a partnership or a limited company.

To inform HMRC, you can use a dedicated online form or contact them via the National Insurance helpline.

5 common mistakes when selling a business

There are mistakes made by business owners when pursuing a sale, and the five below are the most common:

• Disorganised documents, leaving buyer questions unanswered
• Looking to sell their business when revenue is decreasing
• Not maintaining confidentiality
• Failing to realise the value of the business and pricing themselves out
• Making hasty decisions and accepting inadequate offers

KBS Corporate can help you avoid these common pitfalls and work with you to facilitate a successful business sale.

Successfully selling a business

Despite the complexities involved when selling a business, KBS Corporate can guide you through preparation, documentation and deliberation to find the right buyer.

Understanding the sales process will ensure you are ready to proceed, and we have the knowledge and expertise required to prepare you.

Our professionals operate across multiple specialisms, offering you a team of experts to secure the deal you deserve for your business.

Frequently asked questions about selling a business

How long does it take to sell a business?

Selling your business is not a process that can be completed overnight. Whilst KBS Corporate can facilitate expedited sales, it is beneficial to be patient and evaluate your options.

Accounting for sufficient preparation and discussions, a typical business sale can take place any time between 6 to 18 months.

How to sell a business fast?

We understand that personal circumstances may require you to sell a business as fast as possible.

Whilst preparation is still key, hiring an experienced business sales expert can help you realise your timeline as effectively as possible, working through the key steps of the sales process in a timely manner.

Where do I sell a business?

In the modern M&A landscape, there are many ways to sell your business. Platforms across the internet allow business owners to advertise their companies for potential buyers to consider.

KBS Corporate utilises an active outreach campaign, targeting known buyers in multiple industries to increase the volume of interested parties considering your business.

Our long-standing relationships with international organisations greatly improve your chances of finding the ideal buyer or investor.

What will happen to my staff post-sale?

In many cases, your staff will be unaffected following the sale of your business. Buyers are looking to acquire companies that are operating effectively and generating a profit – what better way to do that than to retain the workforce that made it happen?

Can I still operate in the same industry after selling?

Your ability to operate in the same industry will be determined during negotiations as buyers will be eager to retain as many key customers and employees as possible.

Subsequently, you will likely be asked to agree to a non-compete agreement with a duration of three to five years, subject to your sector and region. During this time, you will be prohibited from engaging in activities within the same industry.