How To Prepare A Business For Sale | KBS Corporate

How to Prepare a Business for Sale

Preparing a business for sale can be a daunting task, but we have broken it down with our top 10 tips to ensure you can enhance the value of your company.

10 Tips When Preparing A Business For Sale

We have created a preparing for a business sale checklist that will guide you through the process, highlighting the first things you should consider before you begin to explore the M&A market.

1. Know your goals

Before you start getting all your business affairs in order, it is important to take a moment to confirm what you really want from the sale. Is it time to step away from the business and put your feet up? Are you looking for a business partner to work alongside and grow your company further?

Understanding your goals will streamline the process of selling your business, allowing you to engage with potential buyers who share a common vision for the company’s future.

2. Identify any potential dealbreakers

Further to recognising your own goals, it is wise to set your limits and realise what would be a dealbreaker when pursuing the sale of your business. Buyers consider multiple factors when enquiring about an acquisition opportunity and it will be a smoother process if you can communicate what will be a dealbreaker for you from the get-go.

3. Protect your intellectual property (IP)

Subject to your business activities, you may find yourself preparing for a business sale with a large volume of intellectual property that boasts substantial value. Take the time to review all key documentation relating to IP, cementing your ownership and protecting your assets before you start engaging with the M&A market.

4. Get your finances in order

At its core, a business sale is a financial transaction. As such, ensuring your finances are in order will provide you with a full overview of your capital position and minimise the chance of an unexpected skeleton being found in the closet as business sale negotiations commence.

Being able to quickly provide the necessary answers to a multitude of financial questions will eliminate the stress of having to prepare management accounts and reports down the line.

5. Recognising the value of your business

A business valuation is not as simple as recognising the value of your assets. The value of your company can be affected by both internal and external factors and liaising with a business sales adviser can provide you with a clear illustration of current market conditions. The right buyer will pay you the value which your business deserves, meaning a larger buyer reach can maximise any potential deal.

6. Improve your business’s value

Refining existing operations can improve the valuation of your business. Before deciding to sell, it can be helpful to ensure your company and its interests are secured and protected.

Buyers will be looking at all aspects of the business, ranging from employee contracts to the position of existing customer relationships. Being able to smoothly transfer ownership of the company will entice a larger volume of potential acquirers.

7. Market your business for sale

A business for sale is a chance for a buyer to develop their own interests and they will be looking for the most attractive opportunity.

KBS Corporate produces comprehensive marketing materials to effectively communicate all the unique selling points of your company, distributing professional documents to a broad network of buyers to greatly improve your chances of succeeding.

8. Proper tax planning

Often, the single biggest cost of selling a business is tax. If you sell your business for a profit, you will have to pay Capital Gains Tax (CGT) on anything above your tax-free allowance.

K3 Tax Advisory, a sister company of KBS Corporate, has a team of chartered accountants and chartered tax advisers with specialist knowledge in mitigating the tax implications that inevitably arise in business sales.

9. Due diligence

As part of the business sales process, buyers will have an opportunity to investigate your business and confirm the assumptions they have made about its financial position.

You must be ready to communicate with the buyer and answer all queries that may be presented during due diligence. Factors to consider include settling any ongoing disputes, clarifying the status of all contracts/leases and bringing accounts up to date.

10. Hire expert business sales advisers

It is a big decision to sell a business, all the more so for those who have invested a huge amount of time and money in building up a successful company – perhaps over several decades.
KBS Corporate offers a tailored, unique service encompassing every aspect of a sale process, removing the stress of searching for a buyer and freeing you up to concentrate on maximising your business value.

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