The Business Legal Services Blog

Advice for your business: On the 6th day of Christmas…

…lay good foundations.  

Never mind getting six geese to lay, turn your business into a golden goose by building great foundations that will ultimately help it sell.

Making sure your company is marketable takes skill, attention to detail and good advice. As with any commodity, the key is to ensure you have an attractive proposition for potential buyers. Many business sales fall through due to a combination of poor planning and ill-judged management decisions. It is, therefore, essential that preparation starts well in advance of any negotiations.

There are four stages to the sale process, namely preparation, market testing, negotiation and completion. However, in advance of this you will need to consider whether you wish to sell your shares in the business and/or its assets, as this will impact on the amount of tax you pay after the sale has completed.

Preparation should start at least a year before the anticipated transaction. As the business owner, you need to ensure a strong management team is in place to continue day to day operations and once the objectives of the company have been clearly defined, it should be easier to work out a timeframe for the sale process.

Market testing involves researching potential purchasers and making initial approaches that may pay off in the long run. You need to understand where your business fits into its sector and how it compares with competitors. You will then need to determine how it is performing in relation to your rivals and understand the overall economic landscape, to ensure conditions are right for you to sell.

The next step is negotiation, which involves a detailed evaluation of interest, receiving offers, bargaining and reaching an agreement in principle. Finally, completion is reached once contracts have been drafted, the finances agreed, due diligence carried out and contracts signed.

To find out more about selling your company or how to get it in good shape for maximum value, always employ professional advisors. We can handle the transaction, leaving you to concentrate on running the business. Speak to our specialist corporate solicitor, Rob Moore, for more information on 0114 218 4000 or email info@tayloremmet.co.uk

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