It is odd, we all know that the time will come eventually, when we need to move on to do something else. This could be retire and indulge in our hobbies or other interest or to just cut back on the time we spend running the business, but we are all reluctant to face up…
Where do I get a buyer for my business when I am ready to sell and how do I get my business into a position ready for sale?
Where to get a buyer will often depend on the type of business you are in. You may have someone in mind, it could be a supplier or even a competitor. It could be an internal buyer, your management team or employees, or family members. Very often third party buyers will purchase to increase market share and so they will be interested in your database of customers and your systems.
A buyer will often add what you do to what they do, an extra product line, or access to a new market.
It is often the case that a seller does not know where to look for a buyer (this is always assuming of course that the seller is looking at a third party sale, there are other options). In the event that the seller does not know of a buyer then there are Business Brokers or Agents who job it is to find buyers for sellers. They also help negotiate price and structure of the deal.
Before putting your business on the market though, consider first getting it into shape for the buyer. Running your business on a day to day basis, possibly looking at minimising tax liabilities and extracting profit, is a very different affair to running it with a view to sell. A buyer will look at different aspects to you when you are running it normally.ants to see that the business has been profitable. They will look at its history, so be prepared to present three years historic accounts and management accounts to bring the position up to date.
Get your documents together ready for a buyer. They will want to see your company records, the register, share certificates (for a limited company), minutes of meetings, your articles and memorandum. If your occupy premises under a commercial lease then get the original counterpart lease ready. Review the terms, you will be asked about how long is left to run on the lease, is there a break clause, is it in or out of the Landlord and Tenant Act 1954, what is the rent, when is the rent review, what are the service charges?
Get your contracts ready. Look to see if there is any change of control provisions? Is there any restriction on changing the contract from one business to another (novation)?
The buyer will also ask for details of employees, their names, start date, age and salary. Get the employment contracts and employment handbook ready. A buyer will ask about pensions and auto enrolement.
An important aspect is to have your business processes written down so that the buyer can walk in and operate the business immediately without having to work out how everything works. How does the business obtain customers? How does it contract with them? When the business obtains work what are the stages of delivery of that work? What is the invoicing process?
If you have any queries on how to get your business ready, or where to get a buyer, contact me at firstname.lastname@example.org