How to Get Your Business Ready for Sale

Evaluate your role: Is the business dependent on you? Identify key relationships with customers and suppliers and begin shifting those responsibilities to others. The more dependent the business is on you, the longer the handover process will be. 

Management team: Does your management team have the capacity to run the business without you? Can they step up and take on leadership roles without disruption? 

Employee contracts: Are all employees equipped with clear job descriptions and formal contracts? 

Organisational chart: Develop an up-to-date organisational chart to clearly identify key personnel and outline their roles. What responsibilities do you currently hold and who is equipped to take them on post-sale? 

Review operations: Are there opportunities to improve processes or be more efficient? 

Make changes: Make the necessary changes as soon as possible. For example, does the reception area look welcoming and successful? Does the factory look tidy and efficient? 

Review financial records: Review and organise financial records (P&L, balance sheets, tax returns). Identify any unusual items and note the explanations for these. Consider getting some forecasts prepared and take time to understand what the historic and forecast numbers tell you.  

Eliminate liabilities: Eliminate liabilities and reduce risks. For example, review your insurance cover – are there gaps? Have you made provision for all liabilities of the business (e.g. product warranties)? Is the concentration of sales with one customer putting the business at risk, and can anything be done to reduce this risk? 

Customer relations and brand reputation: Consider the business’s reputation and social media presence. 

Business summary: Prepare a business summary document for potential buyers to get them started. 

Contracts: Are contracts in place and up to date where necessary? 

Intellectual property: Is the company’s intellectual property protected? 

Accreditations: Are all accreditations up to date?

• Store all documents in an organised manner to streamline the due diligence process 

• Present a clear impression of organisation and efficiency 

• Consult your advisors to obtain a list of documents a buyer will want to review during legal, financial, and commercial due diligence 

• Begin collating these documents in preparation 

• Eventually, upload them to a virtual data room for review by the buyer and their advisors 

• While reviewing and collating documents, keep your plans confidential or restricted to a small group. You don’t want to cause instability in the wider team. 

• Organisation, organisation, organisation is key at this stage. Having a clear, pre-established goal will serve as a motivator through the process. This can be a difficult stage as you balance maintaining business as usual while gathering information and making changes without the wider input of your team. You may want to bring a few key colleagues into your inner circle.