KEITH FERGUSON of business advisers PKF says that selling a business may be a once in a lifetime opportunity, so it’s important to get it right

MANY people only get one chance to sell their business.

Preparation, preparation and preparation is essential if you want to take full advantage of this potentially once in a lifetime opportunity.

Define your objectives – Do you want to fully or partially retire, raise money so that you can buy another business in the future, change your lifestyle or potentially relocate? Having a clear picture of your goals is essential. It will drive the way you sell the business, the terms and timing of the sale and the degree of any on-going involvement you may wish or need to retain.

Prepare the business – If you wish to leave the business, it is essential you have a management team that can continue operations. Try to show evidence of recent business growth and, just as importantly, that there is potential for further growth. Make sure everything is fully compliant with all current legislation and that all relevant legal documentation is up to date and readily accessible. It is often worth seeking independent expert advice when undertaking such a “business health check” as, although it requires time, it will help maximise the attractiveness and value of the business.

Get external advice and support – To get a good price you still have to run the business successfully, but the selling process can be time consuming. Appointing an experienced, objective adviser to do a lot of the leg work will provide an extra efficient resource to help achieve your goals.

Identify potential purchasers – Although you may be tempted to do this yourself using contacts, trade journals and knowledge of your market place, external advisers offer a higher level of confidentiality, which will help protect the business during the sale process. Advisers may also have access to business networks and corporate intelligence databases. This may mean that they can identify “strategic buyers” who may be looking to enter your industry and “financial buyers” including private equity and high net worth individuals who may have sold their business previously and are seeking a new opportunity.

Negotiations – Having found your purchaser, the real wheeling and dealing begins. But remember, you will have the negotiations to manage but still have your business to run. This is when an experienced adviser can provide not only the necessary skills but the time required to achieve a successful outcome and perhaps a more favourable deal.

Most corporate finance advisers can manage and control the sale process for clients, liaising with all parties and reducing the burdens that would otherwise fall on the shareholders to allow them to concentrate on running the business.