Your business should always be groomed for sale because you never know the moment….

Your business should always be groomed for sale because you never know the moment….

Once a business is put up for sale the interested parties start circling and this is exactly what you want. But , and here is the big thing about selling a business – if there is blood in the water these guys will smell it a mile off , before you can mention the words “due diligence” .

Grooming a business for sale means that by the time you are market ready everything is ship shape or at the very least you have a game plan how to handle potential problems or have a reply read and waiting for the purchaser, who is after all seeking to pay as little as possible for your lifetime’s work.

At this juncture you will no doubt be thinking to yourself that you have absolutely no intention of selling your business in the “foreseeable future” , whatever that timespan may be, and you probably have no idea anyway. But what if the unthinkable happens in your personal life or a major unexpected political event occurs (think Brexit or Trump) and you start losing sleep at night.

When a game changing issue crops up, which could be a competitor or technological revolution or even a legislative change , sure as day follows night the disposal of your beloved business will suddenly burst onto your radar and take centre stage just when you didn’t really expect it. Now, if you have a certain insight into your marketplace that perhaps others are lagging behind with or even a contrarian view then the time to quit is right now, but what if your business is in such a mess that nobody will pay you what it is really worth ?

The analogy to selling a car is probably the best way to look at it. While the vehicle may serve you faithfully every day it has multiple scuffs on the bodywork (indicating a careless owner) and when you turn on the ignition it splutters and coughs (perhaps an indication of lack of maintenance) . It is not simply a matter of accepting a lower offer , they will simply walk away. Imagine if you spent a couple of hundred pounds tidying up the bodywork and changing the spark plugs and filters ? Not just serious buyers with serious offers but a headache off your mind and the satisfaction of the right money.

But the main point of this article is that the time to do all these preparations is when you don’t need or want to sell, because regular maintenance means that you are always in a fit state to sell. Even grooming a business for sale by tidying up the ledgers gives clarity to a buyer as to how the finances are managed. Why should a buyer spend two days picking through old balances to ask you about recoverability or liability when you can clean it all up in advance ? Time is a buyer’s most precious resource and they won’t hang around if you present the with a shambles.

Time also a valuable resource for you and it is so much easier to undertake running repairs throughout the year , as a monthly routine perhaps, than be aced with week son end of trawling through paperwork and keeping on top of the daily operation at the same time whilst facing the stresses and pressures and dealing with prospective buyer.

No doubt at this juncture you are thinking smugly to yourself that your business is profitable , it is efficient and all the paperwork is in order. It may be so or it may be giving the appearance of being so. Perhaps you need an outsider to give things the “once over” because I’ll bet you that your employment contracts are not up to scratch and your insurance policy won’t pass muster on product liability.

So, in today’s fast moving and uncertain climate where a lifetime of work can be destroyed in minutes, when you need to move …….you need to move. Forewarned is forearmed.

Selling a business

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