Do take advice
Although you will be very experienced and knowledgeable about your own business, its trading history and its prospects, you are not expected to have previous experience of this situation to draw on. Early advice, therefore, is essential to set you on the right path, even if it is just an initial conversation to advise you about the process.
Specialist corporate finance advisers can help you structure the sale in a way which works for you, both in terms of easing out your own involvement, and to any tax liability you may have. Our own Corporate department is frequently called on to offer its own expert guidance through what can be a complex process, calling on the additional supporting expertise of our own property, employment, and litigation teams as required.
Do consider your long term plans
If selling your business interest is on the cards then an unexpected approach might be a welcome development. But if not, don't feel pressured to sell. You need to decide if the timing and the terms being offered are right for you.
Don't respond straight away
Take your time. If you are interested in a potential business exit then it would pay you to make some enquiries about the person who approached you. Who are they? Why are they interested in you? Are they legitimate?
Do consider your response
Any buyer will want to find out specific details about your business. Details of your products, services, future plans, proposals, contracts, and current tenders are all of interest and form the buyer's "due diligence". But these are all confidential to you and if matters fail to lead to a sale, these could offer the buyer a competitive advantage in the marketplace. Before any such exchange of information takes place you should have a comprehensive confidentiality agreement, or NDA, in place to establish what the information can be used for and the terms of its disclosure.
Don't underestimate your value
Many business owners are pleasantly surprised when they discover how much their business is worth, and how much it might be worth to a potential buyer. Although a professional valuation might seem like an unnecessary expense, it can easily pay for itself if it helps bolster the sale price.
No buyer likes a disorganised seller. Take the time to arrange your important contracts and papers, taking care to ensure that they are accurate and complete. Sales can be long and involved processes, so any gaps in your information will only prolong matters.
Do help the buyer
The buyer wants to make sure that your business will be a worthwhile investment. So if their investigations uncover any "glitches", take the initiative to provide an explanation. But beware. Too much explaining might be cause for a buyer to be concerned.
Plan for life after the sale
It may seem obvious, but take some time to consider what you are planning to do afterwards. If you are not quite ready to retire yet then the buyer may need some assistance in managing the integration of your own business into theirs. Likewise, if you want to start a new venture, consider if it is likely to harm the prospects of the business that you have just sold. The buyer will almost certainly require restrictions to prevent you from doing exactly that.
Remember, if you are looking to sell and you have someone interested in buying, most obstacles can be overcome. Experienced advisers at Pinney Talfourd are available to help you every step of the way. Early advice is rarely wasted advice.