How do I get my business ready to sell?

So, you're trying to sell your business. You know the big picture, of course - what your business does, what you think it's worth, where the weaknesses and strengths are relative to the market and your competitors. So, you just hit the button, right? Wrong!


The process of selling a business is, strangely, not actually about the big picture. That takes care of itself. Getting the sale over the line at a price you are happy with is actually about the details, the chemistry, the pitfalls and not enabling somebody to find a way to chip away at your objectives.


Use these tips to minimise the trip hazards. They're not the headlines. But they should help make the process a little smoother. 


Get your house in order

  • Get your accounts straight, up-to-date, clean and transparent.
  • Put your accounts on a cloud-based system.
  • Use a package that allows you to easily model multiple scenarios, projections, time horizons and a variety of possible outcomes.
  • Track non-financial KPIs - they inform ‘the story’.
  • Be ready for Due Diligence - customer contracts, leases, valuations. If this means bringing some employees 'inside the tent' - be careful!


Be clear what you are selling

  • Know your industry, markets, competitors. It's never too early to think about who might want to buy your business.
  • Understand the impact of debt and cash on sale price.
  • Identify any personal assets that you use in the business.
  • Articulate the strategy that you have been following and be ready to demonstrate progress that has been made. Create (but do not necessarily share) a SWOT analysis.
  • Minimise your own role (and that of any other departing shareholders) in the day-to-day so that you are selling something that works without you.


Expect your people to behave in their own interests

  • Get your team up to scratch and deal with any weak links.
  • Assess how reliant you are on 'black art' individuals who do something really valuable but nobody else really knows how they do it.
  • Tie in key people for the duration of the sale process. Provide financial reward for those that stay to the conclusion. Plan for what you will do if they leave pre-sale.


Prepare for the process

  • Have a timed, coherent plan for the sale event. 
  • Be aware that your actions as you prepare may make your intentions obvious to some members of staff. 
  • Prepare a scripted response that you use to deal with internal questions about your plans - they always arise and usually unexpectedly, so be ready.
  • Time your sale to make the most of natural performance peaks.
  • For smaller scale entities, consider a selling agent to market the business and filter initial queries.
  • Prepare two levels of prospectus; a short one for people 'sniffing'; and a more detailed one for buyers that you consider to be serious. Both should demonstrate evidence of the value you are selling.
  • Have an NDA ready to go.