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Business Selling Guide
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How to Start Selling the Business:
"How do I go about selling the business?" is a common question for many UK business owners. While selling the business can be emotionally tough – you’re moving on from years of hard work and personal investment – it’s important to remain objective. When selling the business, your business becomes a product in itself. You will need all your commercial acumen to ensure you’re selling the business for the best price. There are a number of considerations to bear in mind when selling the business:
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The Right Reasons for Selling the Business:
Establish why you’re selling the business. Everyone has a few outstanding primary reasons for selling the business, but it’s important to be thorough. Take time to ask yourself, ‘why am I selling the business? Establish your own needs, and clarify how selling the business will help meet these needs. What are your needs as a manager? What are your needs as an owner? What are the needs of the business itself? All of these factors must be clear in your mind before you start selling the business. |
Selling the Business at the Right Time:
Reasons for selling the business will change over time. Stay objective, and consider the past, present and future benefits of selling the business. The market value of any business for sale is in a constant state of flux; factors such as the economy, the time of year and the maturity of the business will affect the value. Selling the business is a challenging process, full of uncertainty; you need to be able to say with confidence, “this is the most profitable time for selling the business.” |
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Selling the Business to the right buyer:
Who you’re selling the business to is a major factor, particularly if the emotional attachment is strong, so make sure to examine every option objectively.
Competitors are strong potential purchasers. You may be thinking, “There’s no way I’m selling the business to my competitor,” but make sure you at least consider it. Your business could be highly valuable to them, particularly if you can expand their market share.
If their professional reputation is tied to the business, or if they have always wanted to be their own boss, then consider selling the business to your staff. Selling the business to the existing management team, or management buyout (MBO), makes for a smooth, stable handover.
You may have a customer or supplier who wants to expand their own business into your area; they might lack the systems, contacts and expertise that you have built up over time. Consider selling the business to them. They may have already been looking at a similar business for sale.
Approaching these parties directly may alter the value of a potential transaction; think about selling the business through an agent before entering negotiations.
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Selling the Business at the Right Price:
The price you end up selling the business at will vary greatly depending on the location, industry time of year you’re selling the business in. To make sure you’re selling the business at the correct market value, fill in our Business Valuation Form for a discreet, no-obligation valuation from a nearby Commercial Estate Agent.
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The Right Attitude when Selling the Business:
When selling the business, the change can impact your working attitude, and the attitude of your staff. You’ve got to keep your staff motivated and your customers happy when selling the business; a drop in morale could set alarm bells ringing with potential purchasers.
It's important to keep your options open, even when you’ve decided you’re definitely selling the business. Have a long-term plan for the business, and try to allow for every eventuality in the sale process. Above all, make sure to take professional advice. Acting prematurely on your own initiative could damage the value of a bid, so make sure you’re talking to individuals who know how to go about selling the business. |
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