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The Business Magazine January 2024
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How to… get ready to sell your business 

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David Smellie web

Research carried out on behalf of Evelyn Partners has revealed that the majority of business owners with companies that have annual turnovers in excess of £5 million are preparing for an exit with around 40% looking to sell in 2024. The reasons behind these accelerated exit plans vary from political uncertainty and complications surrounding post-Brexit trade arrangements, to the struggles with obtaining capital and the effects of high inflation. David Smellie, corporate and commercial partner, B P Collins, suggests key steps you can take to increase the chance of a successful sale. 

  1. It’s important that you deal with any skeletons which may exist before putting your company up for sale. These could be issues concerning contractual, financial, property or HR matters – anything that might lead a buyer to place a lower value on your company than the price for which you wish to sell it.  
  1. You should work with an adviser to ensure that all of the records, contracts and approvals are in place and properly signed and everything that should be documented has been documented.  
  1. You may not have appreciated how much your company may be worth so it is important to get an expert to give you a valuation so that you will know what price you could achieve.  
  1. It is important to appoint a team of experts to assist you with the sale process. Members of the team could include a corporate finance expert, solicitors (who should be experienced in corporate transactions) and your accountants.  
  1. The ‘deal machine’ when it gets going is remorseless. There is no guarantee that the sale will succeed and so it is vitally important that you ensure that the business continues to be successful. 
  1. Engaging an expert to find a buyer for your company, to look after the sale process and be first in line when negotiating the price can be hugely helpful. They will also ensure that offers are received from as wide a pool of potential buyers as possible and so maximise the value that you will receive.  
  1. You may decide to sell to management or to an Employee Ownership Trust. The experts who you appoint can assist in determining the correct sales method that you should follow. Without those experts alongside you, a possible exit option may be missed.  
  1. You will need to decide how to conduct the sale process and an expert can assist with this. You could go down the route of an information memorandum (followed by a request to make best and final offers) or you could make discrete approaches to potential buyers.  
  1. Solicitors who are appointed should be experienced in transactions of the type that you are going to undertake. Do not be frightened to ask them to illustrate that they have the necessary experience to bring value to the transaction. 

B P Collins’ corporate team is ranked in Band 1 by Chambers UK – one of the UK’s leading legal directories, which also recognises David Smellie as a Band 1 Corporate lawyer – its highest tier. 

For further information, please email [email protected] or call 01753 889995

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