Business advice: Selling a business - what you need to know
At this time of year a useful guide to selling a business might catch the attention of people pondering their future. Robert Newman responds to an Any Answers thread where a member enquired about just this - selling his freelance business.
Before you even think about placing your business for sale there are some things you should do first. The first thing is to gather information about the business, such as:
- Three years' profit and loss statements
- HMRC tax returns for the business
- List of fixtures and equipment
- The lease and lease-related documents
- A list of the loans against the business (amounts and payment schedule)
- Copies of any equipment leases
- A copy of the franchise agreement, if applicable
- An approximate amount of the inventory on hand, if applicable
- The names of any outside advisers
Continued...
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A point that
many forget, Moonbeam.
I have a client that is going through a divorce where solicitor wants to know value of business. They don't seem to like it when you tell them nothing without client. It's a bit more involved but that's the bottom line.
And What About the Key Man Element?
I've had a number of clients tell me confidently over the years they were considering selling their business. None of these understood that without them the business had no value.
Even if you can find someone to buy your business, they will probably value it at much less than you would because they might not be prepared to put in the hours you've put in to get it to where it is today.