Most business owners spend years building their business. Far fewer spend time preparing it for sale. The reality is that whether you plan to sell in two years or ten years, the best time to start preparing is much earlier than you probably think.
Why?
Because buyers aren’t just buying last year’s profit.
They’re buying confidence.
They’re buying systems.
They’re buying a business that can continue to succeed without relying on the owner being involved in every decision.
What makes a business more attractive?
Some of the biggest value drivers include:
Accurate and up-to-date financial information
Strong and consistent profits
Reliable cash flow
Documented systems and procedures
A business that isn’t totally dependent on the owner
Good management information and regular reporting
Long-term customer relationships and recurring income where possible
These are exactly the things that make running your business easier today as well.
Don’t forget the tax planning
Selling a business isn’t just a commercial decision; it’s also a significant tax event. Planning well in advance gives you time to consider things like:
Whether your shareholding structure is still appropriate
Whether Business Asset Disposal Relief may be available
Succession planning for directors and shareholders
Any changes that should be made before a sale rather than afterwards
Many of these decisions need to be made before negotiations begin, not once you’ve accepted an offer.
Even if you’re not selling soon…
Building a business that someone else would want to buy is a great goal in itself. It usually means that you’ve created a business with better systems, stronger financial information, happier customers and less dependence on you working every hour of every day. And even if you never sell, you’ll probably end up with a more profitable, less stressful business to run.
If selling your business is something you’d like to do in the future, we’d love to help you prepare early so that when the opportunity comes along, you’re in the strongest possible position.