What is the Process for Selling a Business?

Selling your business is a complex process involving a number of steps, each requiring careful planning and execution.

The key to a successful sale is working with professionals with expertise and knowledge of your sector and type of business, who can support you step-by-step towards a smoother sale.

From preparation and planning to identifying buyers and negotiating a deal, here is an overview of the process for selling a business.

Business Appraisal

Firstly, you need to understand the value of your business on the market. Arrange a business appraisal with an experienced broker – one with expertise in your industry.  Choosing the right adviser who understands that no two businesses are the same is vital to ensure an accurate valuation of your business and a swift and seamless sale that achieves maximum value.  

Preparation and Planning

Clearly define why you want to sell your business. Whether it’s retirement, a new opportunity or simply time to move on, understanding your motives will guide the process and give you clear objectives.

Crucial to the overall success of your business sale is preparation. Make sure your financial records, legal documentation, contracts, leases and all relevant, important documents are up to date and well-organised. They will be of interest to prospective buyers and will help streamline the due diligence process.

Research

If you are working with specialist brokers, they will begin the process of researching the market, using their knowledge and expertise to identify lists of potential buyers.  

Marketing

Using knowledge of your business and the information gathered through the research process, your broker will prepare bespoke marketing materials tailored to highlight the strengths of your business to interested parties. 

Your advisers will devise a marketing campaign to promote your business which will take account of your requirements for confidentiality.

Buyer profiling 

Your broker will screen potential buyers according to the type of offer and buyer you are looking for. By understanding your requirements, your broker will use their skills and experience to look beyond the financial information and identify the best fit for your business. Viewings and meetings with prospective buyers will be arranged. 

Negotiating the Deal

By this stage you may have multiple interested parties for your business. Regular communication is critical as your broker will provide feedback on viewings, evaluate any offers made and will negotiate on your behalf to get the best deal for you.

Due Diligence

Once you have a preferred buyer your adviser will seek to agree Heads of Terms and begin the process of Due Diligence when the buyer conducts a thorough review of your business including financial records and other relevant documentation. Be prepared to address any concerns or issues that may arise during the due diligence process. Your broker will assist you throughout, ensuring timescales are met and co-ordinating with all parties to support the smooth running of the process. 

Deal Completion

Your solicitor will work with the buyer’s solicitor to draft a purchase agreement. Depending on the terms of sale, you may plan to stay involved during a transition period to help the new owner settle in. 

Selling a business is a complex process that requires careful planning, expert advice and strategic execution. By understanding each step and working with experienced professionals, you can navigate the process more smoothly, maximise the value of your business and achieve a successful sale.