Four People To Consult When Selling Your Business
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Selling your business might have been your ultimate aim, but it’s not everyone’s goal. Even if the decision to sell wasn’t always your plan, but the idea has come naturally as part of the evolution of your one man band or SME, there’s a lot more thinking to do before you head to market.
There are decisions to be made far beyond when you want to sell up. For example: who are you selling to? How long will it take? How much are you willing to sell your business for? After all, you’ve built this business from the ground up with the effort and support of those close to you. It’s not a choice you’ll make lightly. To help you, there are four people who you should include in the process, to clarify your options and help you to see the wider picture.
When it comes to selling your business, if you’re in the thick of it, it can be hard to see above the parapet to the market beyond. Your solicitor will prepare you for the “due diligence” any buyer’s solicitor will undertake as part of the buying process.
When buying a business, the buyer will want to find out as much information as they can on financial and commercial matters, intellectual property rights, share purchase or asset purchase agreements, employment contracts and more before committing to anything, and acquiescing to this can take time and patience. Let your solicitor deal with organising this process. This is their field of expertise and it will free up your resources to help you deal with the many other tasks awaiting your input.
Speaking to your accountant will make sure your profit and loss account and balance sheets are totally prepared for a sale – that is, “clean”. The buyer needs to know the status of your finances as a matter of urgency when they begin showing an interest, so make it easy for them. They’ll also be able to advise you on whether you need to drop any profit suppression devices, and whether you should choose a share sale or an asset sale.
There’s no formal need to consult with your employees if you’re simply selling the shares as a limited liability, but it’s fair and good practice to do so and helps maintain a feeling of stability. If you’re selling your business and all its assets as a going concern, you absolutely must tell your employees – it’s a legal necessity.
In this case, timing is of utmost importance given commercial confidentiality. It’s often a good idea to speak with your solicitor about when your employees should be told.
Whether your family were instrumental in the start-up of your company or not, your family should be one of the first groups of people you consider first, as they’ll be affected by it most closely. Take time to discuss the sale with your family, especially anybody close to you with a vested or personal interest in the business. This will help you to make decisions with the opinions and wishes of your family in mind.
As always with DRN Commercial, quality service and personal attention is at the heart of what we do. We apply a straightforward, practical and progressive approach, working in partnership with you to find solutions which meet the needs of your business. All our commercial services are director-led and we offer competitive pricing for all services.
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