Three things to consider when selling your business

13 Sep 2017

 

There comes a time when owner-managers decide they are ready to sell their business – either hand over the reins to a family member or just change up for something different. Plenty of people have a really solid plan in place as it can take years to implement a business sale, but we have added in a few of our own key points to consider if you are thinking about taking on the task.

 

Don’t be tempted to over-value

Remember you are likely to value your business higher than a prospective buyer. There is nothing wrong with aiming high, but you won’t necessarily get money for potential alone. If a business is simply a concept without a revenue stream then there  is rarely value to a prospective buyer.  In fact, there will be no real business to sell.

If you think this applies to you, perhaps ask yourself the question: “Is my business ready to sell?” What if you waited a few years to let your business realise its potential?  The old mantra of ‘build, grow, sell’ has it that a third of the value of a business is created in each of these there phases. 

 

But, don’t under-value either

Linking in to the above, that doesn’t necessarily mean you should compromise completely and end up under-selling your business. There will always be a discrepancy in how much you think your business is worth, and what others are willing to pay. This is even truer of smaller businesses, but it can happen throughout the chain.   The objective should be for you to claim a share in the future value which the new owner will build with your business, i.e. to sell if you can partly on the potential in the business which is still to be realised.

 

Are you in?

Finally, the all-important point to consider is – are you ready? Can you cope with the changes on the horizon and are you clear on the pathway forward. Rapidly changing technology, personnel movers and shakers and growing business trends can feel like a daunting prospect for many business owners. If you are ready, be prepared to go with your gut instinct and plan, plan, plan for a successful sale!

 

If you would like some advice for your business, whether it is starting up, selling up or sprucing up your business plan, contact the Corporate team at DMH Stallard using the details below.

 

 

Further reading

Use of statutory demand to make company insolvent suspended until June

Blog, Legal Updates
08/04/2021
Cheraine Williams looks at more temporary Covid-driven measures that will protect businesses and tenants from possible legal action
Read more Read

New guidance issued for valuation of flats and investigating fire safety

Blog, Legal Updates
07/04/2021
Cheraine Williams looks a the current situation facing leaseholders looking to sell or re-finance their property; will new guidance provide clarity?
Read more Read

Government sets new energy targets for domestic and commercial buildings

Blog, Legal Updates
06/04/2021
UK law requires net zero greenhouse gas emissions by 2050; new rules and standards for heating and powering buildings will have a significant impact
Read more Read

Covid regs prevent landlords taking action to recover rent for more than 500 days

Blog, Legal Updates
01/04/2021
Just seven days’ rent arrears used to be enough for commercial landlords to take action; the latest adjustment pushes that out to 554 days
Read more Read
  • Brighton Office

    1 Jubilee Street

    Brighton

    East Sussex

    BN1 1GE

  • Gatwick Office

    Griffin House

    135 High Street

    Crawley

    West Sussex

    RH10 1DQ

  • Guildford Office

    Wonersh House

    The Guildway

    Old Portsmouth Road

    Guildford

    Surrey

    GU3 1LR

  • Horsham Office

    Ridgeland House

    15 Carfax

    Horsham

    West Sussex

    RH12 1DY

  • London Office

    6 New Street Square

    New Fetter Lane

    London

    EC4A 3BF

  • Get in touch