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Four Things You Can Do To Prepare Your Company For Sale

iStock_000012763260Small (2)In ideal circumstances a business owner should start preparations to sell a company at least two years before the date they want to be retired.
 
A business typically takes six to nine months to sell (Read this article to find out why) which means starting preparations to sell at least 18 months before the sale process gets underway. Even if you have not planned that far ahead, there are still things you must do to prepare your company for sale before putting it on the market.
 
 
What Needs To Be Done To Prepare A Company For Sale?
 
Get everything in good shape.

Get slow moving and obsolete stock out of the balance sheet, clean up shareholder loans and remove any family members that do not really contribute from the books. Tidy up storage areas and that corner where old equipment goes to die. Applying a lick of paint to shabby areas, especially the reception, can be worth thousands.

Think carefully about the timing.

It’s always easier to sell when a business is growing and profitable. Give yourself at least a year’s clear water after any adverse event, such as losing an important customer, or a large bad debt. You don’t want to start the sale process on the back foot.

Invest in professional advice.

Talk to your accountant about the most tax friendly deal structure before an offer is on the table. You don’t want to addressing this issue in the middle of negotiations, when it may already be too late. If you don’t know how to put a realistic value on the business, or how to set about finding a buyer, appoint an experienced broker to handle the sale. Don’t try to learn about how to sell a company alongside the day job – that’s how expensive mistakes get made.

Show buyers the potential for growth.

The value of your business will largely be determined by recent performance, but there is an element of cream to be harvested by selling future potential. Put together a growth plan that shows potential buyers the most promising ways to expand the business. A few hours work pulling together a summary business plan could pay off in a big way.

 

If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
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