Thinking of Selling Your Business in 2023? Key Considerations for Business Owners

December 12, 2022

By Stephen Thompson

New year, new opportunities. Are you thinking of selling your business in 2023? If so, there are a number of key considerations and steps that you should look to take in order to prepare your business for sale. These include:

  1. Obtain a realistic valuation of your business. A good starting point is to speak with your accountants. They can usually give you an idea of what your business might be worth. Ultimately, you may need to obtain specialist valuation advice, but 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.
  2. Accounts and financial information. Make sure that your annual accounts are up to date. Most buyers will conduct an extensive financial due diligence (DD) 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.
  3. Cash and debt. Have a push on getting in cash and also dealing with any aged debt. 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. Also, managing these aspects of your business is good practice, whether or not you intend to sell.
  4. 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 DD 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.
  5. Due diligence. Prepare for an extensive and time-consuming due diligence exercise by the buyer. Make sure that all relevant documents are to hand and can be made available to the potential buyer and their professional advisors. This should speed up the DD process and enable it to go more smoothly, again inspiring confidence in your buyer. 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.
  6. 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.
  7. Obtain tax on the outcome of the proposed sale. 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 Stephen Thompson, on 07970 160166 | for a free initial discussion around the sale of your business.

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