20 per cent VAT 2012 budget 50% return accountancy accountancy fees accountancy services accountant accountant B accountants accounting for dividends accounting records accounting software accounts accounts software administration annuity annuity rates Autumn statement avoid inheritance tax avoidance of tax avoiding inheritance tax bank lending basic personal allowance BCC big picture book keeping Bribery Act British Chamber of Commerce BS7858 budget budget 2011 Budget 2012 budgeting business business accounts online business advice business cash management business confidence business continuity business continuity management business continuity plans business cost management business efficiency business exit business exit planning business finance business friendly business funding business goals business growth business investment business loan business management business owners business performance business plan business planning business record keeping business records business sale business success business succession planning business survival business tax planning business tips bwe based account cash flow Cash flow forecast cash is king cash management Cash-based accounting cashflow chancellor chartered accountant chartered accountant Birmingham chartered accountants chartered financial planner chartered financial planner Birmin child savings children’s savings choosing an accountant client entertaining Cloud accounting Company Tax returns compliance industry contractors IR35 corporartion tax Corporation tax credit control credit control procedure cyber attack cyber crime cyber insurance cyber security cyber threats data security data security. IT security debt collection debt recovery despite some of the bad press over recent years director’s loan account directors loan directors pensions Directors’ loan account dividends doubl Dragon’s Den dragons den Economic expansion EIS email security employee data security Enterprise Investment Scheme enterprise zones entrepreneur Entrepreneur’s relief entrepreneurs entrepreneurs relief ethical hacker Everyone needs to finance their retirement and exit planning finance finance management financial advisor financial difficulty financial forecasts financial freedom financial goals Financial management financial plan financial planner financial planning financial planning checklist financial planning tips financial wellbeing FSTE 100 FTSE100 fund manager gifts global markets growth growth finance HMRC HMRC enquiries HMRC enquiry HMRC IR35 guidance HMRC tax enquiries HMRC tax enquiry home loans how to manage time ICAEW IHT income tax income tax r income tax relief income tax return independent financial advisor information security information security management inheritance tax inheritance tax planning insolvency Institute of Chartered Accountants investing Investment investment advice investment diversity investment in marketing investment management investment options investment philosophy investment planning investment portfolio investment risk investment strategies investment volatility investments investors IR35 ISO 27001 ISO 27001 benchmark ISO 27001 consultants ISO22301 ISO27001 IT security Jimmy Carr jobs keeping the books key perfirmance indicators key performance indicators KPIs kpi's late payment penalties late payment penalty fines late payments legal tax strategy management information management meetings management standards managing data security marketing investment miscalculated tax motivating staff national lottery new years resolution online accountancy online accountancy software online accounting on-line accounting online accounting software online accounts online tax return online VAT return outsourced accountancy outsourcing outsourcing accounts overtrading owner managers Parker Management Consultants partnership agreements passwords Pay off mortgage PAYE paying a dividend Payroll penetration testing pension pension contribution pension contributions pension fund Pension funds pension investment pension investment strategy pension scheme pensions pensions forecast per personal allowance trap Personal financial plan personal financial planning personal guarantees personal pension personal pensions personal tax return plumbers tax safe plan pre pack administration private pension profitable business sale R & D tax credits R&D tax credits recession red tape reduce tax remote working report on economy research and development tax credits retirement retirement planning risk risk return safest passwords Saga sareholder protection cover security of websites Seed Enterprise Investment Scheme SEIS selecting an accountant Self assessment self assessment tax return self invested personal pension selling my business selling your company shareholder agreements shareholder protection SIPP SIPPS small business small business owners small business tax small businesses small firms SME SME business management SME marketing SME tax planning SMEs social media policy SSAS start up start-up stock market succession planning tax accountant tax affairs tax avoidance tax breaks tax charges tax code tax disclosure tax enquiries tax enquiry tax evasion tax investigation tax investigations tax liability tax man tax mitigation strategies Tax planning tax planning advice tax planning schemes tax reduction tax reform tax relief Tax return tax saving tax saving strategies tax savings tax strategies Tax tribunals taxation tax-break time management time management skills top rate of tax tough times UK Bribery Act UK economy VAT increase vat return VAT rise VAT submission web based acc website security when to pay a dividend work-life balance Xero Xero accountancy software Xero accountants xero accounting xero accounts Xero accounts service

3 steps to take before selling your business

Add to: Digg Add to: Del.icio.us Add to: Facebook Add to: Furl Add to: Google Add to: Live Spaces Add to: MySpace Add to: StumbleUpon Add to: Twitter
Friday October 15, 2010 at 5:39pm

Thinking of selling up? There are 3 critical steps to take to make sure you maximise the value of your business.

1. Prepare the numbers
Get your business in sound financial order. Any potential buyer will want to see accurate financial information, including management information and KPIs. They will want to feel you have a handle on your business and that doesn’t just mean looking at the past, it means showing them future potential. Many buyers look for investments where they can make improvements to increase profitability and return.
From your own point of view it’s also important that you’ve done your homework and you have a realistic price tag in mind. There are a number of different ways a price can be arrived at but regardless of which equation you use price usually depends on profitability. Whilst running your business you will have been constantly looking for ways to minimise tax liability by showing lower profits, but now it’s time to show your business in the most positive light.

2. Secure contracts and agreements
Employee contracts and director’s agreements regularly cause problems for sellers, so take a look at yours carefully before you even start the sales process. It could be advisable to renew, or certainly review, all employee contracts, right up to the highest level.

If you have a lot of repeat business from customers make sure there is evidence of this – ideally in the form of signed renewal contracts. If your business is heavily reliant on key suppliers or a highly price sensitive raw material similar contractual agreements ought to be in place. When it comes to selling a business a handshake or gentleman’s agreement with either a customer or supplier simply isn’t good enough.

3. Decide your position
Decide in advance things like whether you will make the sale public or keep it quiet, there can be benefits of either approach, but make sure you are in the driving seat and don’t let prospective buyers spill the beans if you’ve decided to keep it quiet.

Come up with a list of ‘show stoppers’, things you are not prepared to negotiate on, and don’t sweat the small stuff. This will really help you to stay focused and mean you don’t lose out on a great deal or delay signing over items that really don’t matter.

Decide your future position – will you stick around for a handover period? Are you willing to provide a consultancy service to the buyer? If so, on what basis? Make sure you get all of this in writing as part of the deal.

Whilst not an exhaustive list by any means unless you’ve taken these 3 steps first you’ll struggle to truly realise the potential of your business.

Andy Parker
Chartered Accountant

Comments on this post:

There aren't any comments for this post yet. Why not be the first to comment?

Share your experiences:

Your Name  
(to appear with your comment)
Email Address  
(will not be published)
Comments:  
Human Validation Check  
In the box below, please type the characters that you see in the picture. This helps us to ensure a real person (and not a crafty computer!) is submitting this form.

Enter the code shown to the left:

Parker Chartered Accountants and Financial Advisors is the trading name for Parker Business Development Ltd (Registered No. 4116664), Parker Tax and Trust Ltd (Registered No. 06950353) and Parker Financial Planning LLP (Registered No. OC347027). Parker Financial Planning LLP is authorised and regulated by the Financial Conduct Authority. All companies are registered in England and Wales – registered office contact details here