A Guide to Selling Your Business in 2024

December 12, 2023

By Siobhan Williams

Is 2024 the year you plan to sell your business? Perhaps you have spent the past year or so planning your succession or researching “how to sell my business”.

Selling a business can be an exciting time, but there are a number of key considerations and steps that business owners should look to take in order to prepare your business for sale. Our M&A legal experts explore a number of these below.

Valuing your business

Obtaining a realistic valuation of your business is key. Ultimately, you may need to obtain specialist valuation advice, but speaking with your existing accountants will be a good starting point. It is important that you have an idea of the value of your business before you engage in any sale negotiations with a potential buyer.

Confidentiality agreement

Always have a confidentiality agreement or NDA available to be signed by a potential buyer before you start providing them with information in relation to your business.

Up-to-date financial information

Make sure that your annual accounts are up to date. Most buyers will conduct an extensive financial due diligence exercise, so it is important that your accounts and other financial information is up to date and readily available to a potential buyer and their professional advisors.

Due diligence

In addition to financial due diligence, the potential buyer will undoubtedly ask for copies of a variety of documents including contracts of employment, contracts/terms of business with suppliers and customers, insurance policies and details of any recent or ongoing claims or complaints. You should make sure that this information is readily available to the potential buyer and their professional advisors. This should help to speed up the process and enable it to go more smoothly, again inspiring confidence in your buyer.

Good corporate governance

Make sure that your Companies House and other filings (including HMRC) are up to date. A potential buyer will pick up on any filings that are not up to date as part of their due diligence exercise, so the more that you can do to address this beforehand the better. It also inspires more confidence in a buyer if things are in good order from a corporate governance perspective.

Managing cash and debt

Make sure to deal with any aged debt as soon as you can. A buyer may try to reduce the price or pull out of the deal entirely if you have a lot of aged debt and a poor cash position. Managing these aspects of your business is good practice, whether or not you intend to sell.

Tax advice

It can be helpful to obtain tax advice. There are often alternative ways in which to structure the sale of your business and tax advice will probably influence which option you go for.

You can find more information in our Selling a Business guide, or contact Siobhan Williams, on 029 20829 124 | swilliams@darwingray.com for a free initial discussion around the sale of your business.

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