For many business owners, the new year is a time for future planning – planning for business growth, planning changes and for some, planning for the sale of their business. If you are thinking of selling your business in 2021, preparation is key! Here we outline some of the key steps that business owners should take to get ready for the sale of their business this year.
Speak with Your Accountant
For any business owner who is considering selling their business, its important to engage in discussions with your accountant early on. Your accountant should have a strong knowledge of your business, its operations and of you personally, hence they are a great first port of call when considering the sale of your business. Further, your accountant can work with you in advance of selling your business to map out the potential taxation implications of the business sale and how it can be managed.
Plan Out Your Life Post-Sale
The idea of selling your business may seem exciting – you should hopefully receive a healthy financial windfall and will ideally have less stress in your life as a result. Too often however, we find that clients fail to consider what their post-sale life will look like. It’s vital to consider what it is you will do after you sell your business. Maybe you’d like to take some time out before setting up a new business. Maybe, you might like to step away completely from business and retire. Maybe you see yourself having a future role in the business as a consultant or employee. Whatever it is that you desire, it’s vital to be clear on the details of your plan so you can work toward achieving your ambition as part of your business sale.
Engage in Early Discussions with a Transaction Advisor
In our experience, clients who engage in early discussions with a transaction advisor (or broker) are far better placed to achieve an optimum business sale outcome than those clients who speak with a transaction advisor for the first time before going out to market to sell their business. A good transaction advisor can work with you to best prepare your business for sale, increase your business’ sale prospects and price and ensure the business sale process runs seamlessly. Key amongst the early role of a transaction advisor is to assist with providing you with advice on valuation, to assist with preparing a due diligence file for your business, and to map out the best business sales strategy in order to achieve an optimum outcome. A good business sales advisor will work closely with your accountant (and other professional advisors such as your lawyer) when preparing your business for sale, ensuring that their approach and strategies work in conjunction with the long term strategies of your professional advisors.
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Groves & Partners are business brokers and business sale advisors with experience in preparing companies for sale, and executing business sales for business across a range of industries.