• JohnMather@EMC

Preparing to sell your Business

Updated: Jan 4

The lead time to sell your business for it's maximum value can be up to 2-3 years, so it is not as most Directors believe a quick process unless you want to accept a devalued offer for the business; This is because your accountant may recommend a redesign of the business structure, to minimise your tax bill on sale, but the main / most complex element is redesigning your business to run without you, neither of which is very simple or quick to implement.


Selecting which staff can take over your role in the business can either mean gradually Delegating the management's roles to your existing staff, or recruiting new staff who have the capacity to manage the business, so the whole business can run entirely without you (the owner / Directors). There is a high risk that the new owner may well want the current management team to remain in the business to enable a smooth transition and maintain the profitability of the business to prove the business is sustainably profitable.


To maximise the Goodwill element of the company's value (over net asset value), there are several things business owners can undertake:

1. One of the main ways of enabling the sustainability of the business' profitability is to maximise the staff productivity and then embed these systems / processes / procedures in the business. One of the easiest ways new owners often reduce the running costs of a business is by cutting staff or staff hours and one if the best ways to avoid this is by maximising the productivity of every member of your staff.

2. Ensuring each of your Customers has contract is a very tangible way of boosting the value of your business, as this shows longevity and sustainability of your customer base. These contracts should include your standard Ts & Cs, but can also include a payments timetable and list of contacts in the business of who to contact for queries etc. such as complaints and finance and authorisation.

3. It is preferable to have each member of your staff has a Job Description, not only so that each member lf staff knows what is expected of them, but also something that they can be assessed against and so that staff Jobs do not overlap, creating conflict.

4.Also, your business is more valuable to a new owner if you can illustrate that your profits are more sustainable by developing systems and processes that allow the business to continue to operate inspite of new owners / management taking over the business.

This business sustainability shows up best by being able to show that the business operates to documented procedures & processes, so that the staff are able to sustain the operations in spite of a change of management / ownership.

So one of my main recommendations for businesses preparing to be sold is that staff have key procedures they work to, not only for day-to-day tasks but for monthly, quarterly and annual  tasks. This provides the backbone of the company and by tweaking these procedures, a new owner is able to change the way the company operates is sustainable and not just good luck and down to the incumbent management.

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