Parties often underestimate the amount of work that is involved in the sale / purchase of a business. It can be a particularly stressful time for the seller, who will undoubtedly be expected to provide copious amounts of information and documentation to the prospective buyer during the due diligence exercise. Below are a few tips for a seller, to reduce some of that stress.
- Plan Ahead
Most business owners are so consumed with the day-to-day running of their business that they fail to prepare the business for sale. This can result in a business which is far less attractive to a prospective buyer than a business which has been prepared for sale. Making sure that all records and contracts are up-to-date should not be underestimated.
It is more than likely that any buyer will want to carry out some due diligence into your business. This can be a long and onerous exercise for any seller. Getting yourself organised in the months leading up to a proposed sale can save you considerable time and stress at the time of the transaction.
- Confidentiality Agreement
Before you disclose any confidential information to an interested party, make sure that they have signed a confidentiality agreement. The main purpose of the confidentiality agreement is to protect the target company’s confidential information if the deal doesn’t go ahead, by expressly prohibiting the prospective buyer from disclosing or using such information, other than as permitted under the confidentiality agreement.
- Professional Advice
Expert professional advice should be taken at the earliest opportunity and should be continued throughout the transaction. Selling a business can involve complicated legal and financial issues and it is essential to ensure that advice is taken from professionals with experience in dealing with selling / buying businesses.
In particular, accounting / tax advice should be taken to make sure that the deal is structured in a way which will not have any adverse tax implications. Legal advice should be taken to protect your position at every stage of the transaction.
To speak to one of our corporate solicitors about selling your business, or about any other business matter, then please do not hesitate to get in touch. Call 0845 287 0939 or complete our online enquiry form.