May 1, 2019
From the minute a business is founded, an owner will experience many peaks and troughs around cash flow, HR and sales success, as well as failure and challenges of the market. But the most important thing that a business owner must navigate is selling the company when the time is right.
Ensure that you know what you are selling
The first thing you must do when preparing to sell a business is check with yourself that you’re aware of what you’re selling. There are certain questions that you must ask yourself.
First, ask ‘is this my business to sell’? You must be completely sure that there are no other bodies involved in the organisation, which have a stake in the business. Second, ask ‘does the business include property’? It’s important to be aware of this, as inclusion of property will impact on how your business sells and the process that must be completed.
Finally, ask ‘do I own everything that I’m planning to sell?’ If any aspect of the business is owned by someone other than you, this will affect how the business can be sold.
You must also be sure that you have received proper business and property valuation advice.
The next step to take is to prepare information about the business that you would expect to see if you were purchasing for the first time, such as information about the property, title deeds, copies of any contracts essential to your business and regularly recurring bills.
Parties interested in buying the business will want to know what your annual turnover is, what costs you incur on a regular basis and what the outlook for the financial future is.
Do you have all this information available? If not, get your books up-to-date.
Next, check whether you are leaving any items behind that are included in the sale price. If not, which items can be purchased from you separately? This is an important step and is integral to ensuring that it’s clear what business and belongings you are selling for the sale price.
Tax and accounts
You must make sure that your records are up- to-date, including any that need to be sent to Companies House, and importantly, check that you have received the appropriate tax advice for the transaction.
Have you considered the people within the business? Understandably, it is in fact necessary to confirm whether you have employees, and if so, how many. Then compile a list of their ages, date of employment, hours, works, salary/wage, disciplinary matters and provide a copy of their employment contracts.
Gordon Brown Law Firm LLP
0191 388 1778