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business sellers and acquirers

Preparing your business for sale; Article 1 of 3

Many readers may well be very experienced in the subject of selling a business but this series of articles is derived from a presentation given at the Business Show at ExCel in May 2019 and is geared towards the SME business owner looking to sell their business who has had little experience of the selling process.

This is the first in a series of three articles in relation to the process of selling a business.

Fail to prepare, prepare to fail. So the old saying goes.

Never could this be truer than when you are selling your business.

Find out how being in control of the process will make sure everything goes smoothly at Businesses For Sale Live. Being prepared will help you remain calm during this highly emotional time.

Putting in the groundwork to get everything in order – from your accounts to your contracts – before you put your business on the market will guide you towards a successful sale.

Peter explains the key steps in the selling process and gives examples of where things can go wrong – he also shows you what you can do to prevent your deal falling apart.


Has anyone sold their business? Or someone you know has?

What sort of feedback do you have from this or have you heard about it?

I bet it’s not been straightforward and things happened that weren’t expected.

So what proportion of businesses put up for sale actually sell first time round?

Our experience shows that many sales fail because either something goes wrong in the business whilst the sales process is underway, for example the loss of a major customer, or some change in legislation or compliance requirements, or that the buyer changes their mind; this could be from just a change of heart in selling their baby, or more often that they get fed up with the process, the amount of work involved or the apparent never-ending questions from buyers.

The first category whilst maybe somewhat uncontrollable can be minimised by making sure the process goes as quickly as possible, that the business (and seller) are as well prepared as possible and the seller keeps very close tabs on what’s happening in the business during the sale and doesn’t get diverted away from actually managing the business.

The second category very much falls into the realm of proper and effective planning and that includes the decision to sell in the first place including recognition of what is involved for the seller, the business itself and its’ customers and staff.

Fail to prepare, prepare to fail. So the old saying goes.

Never could this be truer than when you are selling your business.

being in control of the process will make sure everything goes smoothly

Being prepared will help keep you calm during a highly emotional time .. You’re selling your baby

Putting in the groundwork to get everything in order – from your accounts to your contracts – before you put your business on the market will help towards a successful sale

Covering today:

The entire business sales process

Geared towards the sme business owner

How preparation is key

What it really means and how it will affect you

Indicate where things could (and do) go wrong

Some of the major things you can do in the preparation stage

I want to go through some of the key aspects of a business sale so that anyone who starts down that path is better prepared for what’s involved and hopefully can achieve a good successful sale.

Deciding and to and then preparing your business for sale are amongst the most important things you will ever do – the more time and effort you put into these, the higher the prospect of getting the best value your business can achieve.

All the textbooks and in fact common sense will tell you that your exit strategy should be years in the making; if only this was true in practice. The typical sme business owner whilst maybe thinking about their exit in the back of their mind rarely sticks to the textbook targets. More often than not they want to go ahead with a sale quickly driven by something that’s happened to them, their family or to the business.

Whatever the driver is do try to take as much time as possible in arriving at your decision, think it through, think about the implications, if there are several shareholders the decision needs to be a joint one no doubt.

Once you’ve decided start by being realistic about timescales; how long does it / did it take to sell your last house? Selling a business is much more complicated as it’s not normally a tangible asset, built out of bricks and mortar that anyone can touch and feel and for which there may be decent comparables and well-established structures for sale.

The typical sme business sale of say a business of around £300k to £5M sales value is currently taking around 12 months or so, sometimes even longer.

When we look at the sales process steps you’ll get a better feel of why this is the case.

The next step after you’ve decided to sell is to make the business as attractive as possible to prospective buyers. From tidying up books and records to simply giving the premises a lick of paint, even minor details could make the difference when it comes to finding buyers and getting a good sale completed.

The biggest issues to try to deal with are as follows:

  1. As just detailed, your books and records need to be up-to-date [share transfers not registered]
  2. Check that your systems and processes are as robust as possible, documented as fully as possible and that you’re data security measures are as tight as possible [not just GDPR but disaster recovery]
  3. Have you got written contracts or agreements with your customers – you need to validate to buyers why you think the business is going to carry on as you say it will
  4. Remember what you’re selling is the future not the past – what’s gone before is history and the business profits from the past are yours; the buyers are only buying the future
  5. Look carefully at your organisation, how easily will it run without you? If you are the business what’s the buyer buying? Try to get it so that the business runs without you
  6. Produce realistic, understandable forecasts that you can substantiate and can be related back to your actual results
  7. Strategically, have you developed your services / products as well as you might? Have you penetrated into those new customers or services that you think you could?
  8. If looking over these items you think you could improve things by spending a bit more time on them then think carefully if now is the best time to sell? or if you want to spend a bit more time improving anything. If you do decide to delay set yourself targets to achieve the things you want to and then re-plan the sale. Relate this to the reasons you decided to sell – some things can be done in short timescales, others take longer, link your target dates together. Talk to your advisers and explain your thinking they may offer valuable insights.

In our experience at Anderson Shaw, many business owners say, in retrospect, that they wish they had done more to prepare the business for the sale.  This tends to come into particular focus as the due diligence and legal stages begin and after a buyer has signed the Heads of Terms. 

Anderson Shaw has offices on the outskirts of Stratford-Upon-Avon and provides business broker and corporate finance services for clients throughout the Midlands and the UK.

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