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How to find the best Solicitor to sell your business

Before Engaging, find the best Solicitor ever

solicitorsFind the best solicitor you can to help you sell your business and guide you through the business sale process. If you already have a good solicitor, consider yourself lucky. Completing a business sale is a job that requires exposure to all functions of business as well as understanding the legal terms and law. Choosing a solicitor should be at the top of your list when you are committed to sell a business.

Not all businesses would require a solicitor to sell, though. If you are selling a website, you can easily find a buyer online and complete the transaction through a form of escrow. However, having a solicitor go into bat for you can help a business’s valuation and increase the multiple. Poor solicitors can wreck the sale altogether. We would hate to see that happen to you so here are a few tips that you may consider before signing up with a solicitor that go hand-in-hand with our pack that helps you beauty parade all your professional advisors.

Competency and Experience

You should be very careful while choosing a solicitor. Your solicitor will not only draw the Memorandum of Information, Heads of Terms, and other sale documents, but also help you during the negotiations. Unless you own a famous brand, the price your business sale fetches would largely depend upon how your solicitor presents your business in the Memorandum. It is, therefore, extremely important that your business sale solicitor has lots of experience in selling businesses and is fully competent in preparing all documents related to the business sale. Your solicitor should have a proven track record in selling businesses similar to yours, and should preferably be recommended by someone you know.

Understanding of Your Business and Industry

Every industry and business has some quirky requirements which the solicitor must be aware of before drafting the sale documents especially if those quirky requirements affects your business, and in turn, your business’s valuation. The solicitor is there to safeguard your business’ purchase price and make sure that the buyer cannot claim back against any indemnities or warranties from you in the future.

Fee Structure

Solicitor fees and commissions can vary widely. Some of the solicitors that you come across might have hidden charges in their fee structures, which might surprise you at a later stage. If you don’t want to be caught unaware and pay heavily, you should thrash out the details of the fees and other charges with your solicitor before signing up and look out for % fees and financial penalties upon contract termination.

Terms of Engagement

The agreement you sign with the solicitor will document each and every detail, including the rights and responsibilities of both parties, i.e. you and your solicitor. Insert the appropriate timelines, penalty clauses, the payment terms and all other details meticulously. Selling your business is a complex matter. Don’t increase its complexity and difficulty by hiring the wrong solicitor. Spend time review the sale document again and again until all parties are ready to sign it!

Interest in Your Business Sale

A solicitor may have a great record and reputation, but from your point of view, it is the interest and involvement in selling your business that should matter the most. If you sign up with a solicitor who specialises in selling much bigger businesses than yours, that solicitor might not take your job very seriously. Apart from reputation, you should also determine the level of interest that your solicitor is displaying for your particular transaction, and hire the best solicitor who is fully committed to helping you selling your business.

Customer Services

Your business sale solicitors should not be so busy that you have to wait for days before meeting with them. They should have a culture of customer services and should put you at their top priority. They should have a reputation for meeting deadlines, as they would be preparing all the paperwork and should not keep you waiting on that.

Expert Window Dresser

When selling a business, a lot depends upon window dressing in order to earn the maximum amount of money from your business sale. Your solicitor should be fully aware of this vital aspect and should pay proper attention to all beauty parade elements. Selling a business is about delivering the right sales pitch. The basic AIDA approach (Attention, Interest, Detail, and Action) should be followed. The strengths of the business should be highlighted while the weaknesses are window dressed. Only an expert business sale advisor can point you in the right direction.


Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”

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How to value a business – an alternative way

Value a business by Calculating your Walkaway Price

I’ve found that the majority of business exit articles focus on how to value a business by using accountancy methods to work out how much your business is worth. I’ve written about those with our ‘quick and dirty’ Discounted Cash Flow (DCF) and multiples articles too. But what isn’t discussed at all, or at least when I was going through my business exit, is what is the rock bottom price tag that you would accept for your business and how you would go about working out what yours is. Do you already have that figure in mind? I call it your ‘walkway price’.

It’s your walkway price because during your business sale negotiations if the figure hovers around a number that is lower than your walkway price guess what you’ll do. That’s right, you’ll glance down at your walkaway price crib sheet for one last check, get up from that negotiation table and walk away in the full knowledge that you know that your business is intrinsically worth more than what’s been offered.

As I discovered, it’s really worth calculating your walkaway price because it will help you understand the reasons why you want to sell the business, sanity check that your desired sale price is realistic and most importantly it provides an invaluable reference point when you’re experiencing the ups and downs of selling.

The earlier you can take the time out to work out your walkway price the better because you won’t have time during the sale process and logical, reasoned statements may not be that easy to come by because you’re caught up in the process. It’s one of those things that until you’re in it for real, you can’t picture it. Calculating my walkaway price was the best thing that I ever did with my business partner before the business sale process began. I only wish that I looked back at our crib sheet more often during our sale process. It would have saved us going down a few dead ends.

Now there are countless ways of getting to that figure. You can use the DCF and multiples formulae to help you or work back from a figure that you have in mind and see if all the costs and what you want to do with the money ties in with that figure. I really believe that all business owners should have their walkaway price ready to hand so I created a pack called ‘Calculate your Walkaway Price‘ to help other business owners get there too which can be purchased from our online store.

If your sale process takes a long time like mine did (nearly two years), then you need to make sure that you re-evaluate your walkaway price at least annually. This way, you can realise any  new value that you’ve created in the business as you’ll find that getting your house in order makes it more valuable. Which, in turn should increase your price tag.

One final thing, my advice would be to keep this information private, even from your professional advisors. The walkaway price should be considered as a last resort measure only to be undertaken if the price tag doesn’t meet your calculated expectations.

Joanna Miller helps business owners navigate their way through the start to finish process of selling a business. Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”.

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5 Key Due Diligence Requests To Prepare for Now (before you sell)!

Due Diligence Requests

Due Diligence Requests5 Key Due Diligence Requests

Due diligence is the analysis and investigative process that follows an offer or letter of intent from the buyer. When you make it to this stage it’s safe to say that the buyer is serious.

The idea of due diligence is to evaluate the potential opportunities and risks of the purchase, and discover any other particular issues. Once completed, due diligence will facilitate the buyers team to manage their thought processes efficiently, so as to deal with and prioritise the decision-making procedure. It will ultimately lead to optimising any deal terms while recognising and addressing risks linked with the transaction.

It’s important to understand that due diligence does not merely entail gathering data and checking boxes. Largely, achievements are based on the worth of future cash flows. Your buyers will need to determine the worth of the particular assets that they are buying or the responsibilities that they are assuming. They will want to analyse the data in the perspective of how upcoming cash flows will be influenced by the issues examined. Due diligence items not only include the hard information that your buyer requires to measure prospective financial, legal, and regulatory experiences, but also provide insights into your company’s physical structure, prevalent practices, available human resources, operational processes, relationships with supplier and customer, competitiveness in the market, and future outlook. Following are the main items required for the purpose of due diligence by the buyer.

Due Diligence Request #1: Sales Forecast

The sales forecast is of utmost importance in a business plan, revealing the detailed forecasted sales for your company. Almost all companies require producing forecasts of their short to medium term sales. Sale forecast is of special attention to potential investors eager to gauge the dimension of a prospective purchase. It is one of the most cared about Due Diligence items requested by the buyer’s team. On the other hand, it is also a complicated section for entrepreneurs to prepare, as they might not have historical statistics upon which to base their forecasts. The key for business owners is to build some reasonable assumptions that they can support. Preferably they must look to discover benchmarks, hence aligning their figures with other businesses in the industry. Sales forecasting need not be 100 % accurate, as nobody can foresee the future. Sales forecasting is intended to assist your buyers weigh up the existing and future demand levels, so that they can estimate the resources that would be required to make those sales. One massive thing to keep in mind is that whatever you supply to  the buyer you’ll have to make sure you can make it happen! Don’t inflate figures or you’ll really have a struggle on your hands when it comes to puting the proof in the pudding.

Due Diligence Request #2: Employee Information

The human resource being the most important and dynamic asset of any organisation, your buyers can’t overlook employee information. The employee information term is used for a broad and comprehensive system that keeps and tracks records pertaining to all the employees in an organisation. It reveals ample details related to their resumes, contracts, job descriptions, leave and attendance records, inter-company transfers and the workflow concerned during the transfer procedure, track of appraisals and promotions etc. It also includes  Recruitment, Payroll and Training Systems of employees in your company. Buyers will be looking out for key employees so it’s important to make sure they don’t jump ship before or during the sale.

Due Diligence Request #3: P&L and Balance Sheet plus Monthly Management Information

P&L and Balance Sheet are the third most important Due Diligence items requested by Buyer’s Team. To guide your business to the financial track you desire it to take, you need to understand where you’re earning money and where you’re spending it. That’s why you must maintain accounts and generate regular reports, including profit & loss account and balance sheet. Whenever you sell your goods or services to others, it costs you money to pay for the production of those goods and services. And, in return for those goods or services, you will be receiving money likewise. So, if you are getting more than you are paying for, you should be making a profit. This record is kept under profit & loss account.

Your balance sheet depicts the balance between your assets and liabilities. The balance sheet for your company provides a clear view of your business worth at one specific moment in time. Generally, it is done at the end of the financial year and provides you the situation of the company from one year to the next. However one can also draft monthly or quarterly balance sheets. Your buyers will be examining financial performance and weighing it against earlier performance. You should facilitate them in the process by providing any details that they request.

The Monthly Management Information shall provide a snapshot of the performance statistics available in the Management Information System on the last day of every month. It is usually posted several days after the ending of the reporting time. Your buyer would like to take a look at the MMI, so you should make sure that you prepare this document every month.

Due Diligence Request #4: Statutory Information on Company

Statutory information on company pertains to the information relating to its statute, code, or written law, which helps to understand the company infrastructure. This information is usually given in the memorandum and articles, and should not be a problem for you to and your team to create.

Due Diligence Request #5: List of Client Contracts

Your clients are your business assets. Consequently, a major part of being successful in business is to keep them close. The number and worth of your client contracts would determine the sale price for your business. Apart from scrutinising client contracts, your buyer may also like to know how you keep the records of your customers.

The Due Diligence aspect of selling your business is a lengthy and time consuming one. If you have time on your hands now, it’s in you best interest to prepare the information needed proactively rather than re-actively. In other words, sort this out now so that when it comes to crunch time you can put all your efforts on making sure you’re hitting the forecasted targets! At Sell Your Business, we’ve created a fantastic Due Diligence pack that will help you prepare. Don’t let the buyer or your team hold you to ransom – get one step ahead! Check out our Due Diligence collection today!

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”


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How and why you should avoid poor service, high volume business transfer brokers

Business Transfer Brokers

If you’re selling your business for under £1 million, there’s a reason to avoid the high volume business transfer brokers!

Selling a business is similar to most things in life. If you’ve got the money, chances are you’ll get a better service and a better outcome. When it comes to selling a company below £1 million it’s often unlikely that a business owner will recruit a professional team to help with the sale. The process is long and the fees are high.Furthermore, the business owner wants to walk away with as much profit as possible!

That being stated, what kind of service does a business owner selling for under £1 million get? From what we’ve discovered it’s not very good at all – and worse, it can be very costly too. Not being an expert in this area, I contacted Andrew Weaver, the founder of to give us an insight on the market and what he’s doing to change the poor service levels and high costs that are currently on offer.

Joanna: Is it possible to get a high value service at a low cost?

Andrew: I have been involved in corporate deals for 10 years.  Selling a business is rarely easy nor quick.  The process is demanding of both seller and advisor with the result being that good quality advisors gravitate towards the size of deal and client that can justify their time and fees. As a very general rule, this tends to be businesses with turnover >£1m.

The vast majority of businesses fall beneath this radar and have traditionally instructed volume transfer agents who, because selling a small business can be challenging and time consuming, provide a service that is as much about protecting their time, as driving best value for the client.  It’s a model based on committing sellers to exclusive contracts, high up front fees and/or large commissions at sale.  Often, for little more than a matchmaking service. I founded Sell My Business Online to help those businesses with <£1m revenues and provide a better service.

Joanna: How have you successfully provided a high value service at a low cost? 

Andrew: Here at Sell My Business Online what we’ve done is create a bottom up service by streamlining the process focusing on the high value unique elements of the process. We’ve removed the need for an exclusive broker contract, invited clients to build up the level of cost and expertise as relevant to their own particular sale process and provided a low cost access to the market via our marketing channels.

Joanna: Can business owners sell without a business transfer broker?

Andrew: Yes! Sell My Business Online is a marketing and sales ‘support’ service.  We enable businesses to get to the market efficiently and cost effectively. There is no agents contract to sign and no agents commission to pay. Clients can purchase additional advisory services by the hour, if required. We can also step into a mandate at anytime, if the vendor feels out of their depth.

We don’t advocate a DIY service for all businesses.  Many business require a much more detailed and sophisticated marketing approach but Sell My Business Online is ideal for the smaller business and straight forward deals.

Joanna: What advisory services do you offer and how much are they?

Andrew: Sell My Business Online is supported by MBA qualified team of corporate deal brokers: Daresbury Company Solutions.

We offer a marketing service at £95 and a £495 advisory service. Most clients start with our advisory service and build up the expertise as required, including using our more traditional advisory services which include buyer research, deal facilitation and mentoring.

Joanna: What are the top 3 tips for business owners looking to sell within the next year?

Andrew:  1)  Good preparation makes all the difference.  Try and sell close too or just after year end – all your numbers are fresh.

2)  Don’t fix price expectations on pre-sale valuation or (worse) on what you need.  Prepare well, have a good marketing campaign and the value will follow.

3)  Be sympathetic to a buyers’ anxieties. You know your business inside out, the buyer doesn’t and buying a small business can be fraught with risk.  The best deals come from parties who are open, communicative and understanding with each other.

So there you have it. It is possible to avoid poor service from high volume business transfer brokers and there are providers who specialise in the <£1m market with a more tailored and open approach allowing business owners to research the market first without having to commit to a broker and their fees. If you would like to know more about Andrew and his company visit


Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale

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Understanding the importance of the data room

Understanding the importance of the data room


Had you been selling your business before the age of the Internet, you would have set up a physical data room for due diligence of your business records by the buyers. A data room becomes necessary when there’s a large amount of confidential data that you want to share with your prospective buyers for the process of due diligence. In old times, this would be a closely guarded room with copies of all documents that are requested or desired by your buyers during the process of business sale. Only one party would be allowed to visit the data room for due diligence of records. In case extra copies were needed, they would be provided after keeping a proper record, so that no information fell into unwanted hands.


Setting up a physical data room is time consuming and expensive (take a look at our data room structure sample in our Free Document samples section). At times, the advisors and accountants of the buyer may have to be flown in from another city just to scrutinise the documents in the data room. Thanks to the Internet, these days, companies establish online or “virtual” data rooms that are accessible to all interested buyers through the Internet. A virtual data room is simply a secure website that contains all the required documents from your company. Some of these documents may be highly confidential, so a virtual data room has fool proof security against hackers or unauthorised access. The people who are authorised to access the information are given login IDs and passwords. Also, you can assign different clearance levels to different people, which means that a person can only access the documents that are required for diligence by that person. Restrictions are applied on dissemination of information through copying or printing.

Although a physical data room still becomes necessary in some highly secretive deals and government contracts, the increasing speed, ubiquity and security of the Internet has made it quite economical and convenient to establish a virtual data room. When you are going for a business sale, many bidders may be interested in your offer. If you have more buyers and all of them are asking you for different company documents for carrying out the due diligence of your business standing and claims, it becomes problematic to deal with them separately. Your data is confidential, so providing your documents to the bidders individually will loosen your control on your confidentiality. Moreover, responding to the buyers’ request becomes cumbersome and requires dedicated resources. The process of enquiry and response is also more time consuming. Your buyer may be in a different part of the world and may require access to the documents at odd hours. All these problems can be solved by simply establishing a virtual data room, which your buyers can access 24×7. Providing logins and passwords to each one of your buyers ensures tight control, as you are all the time aware of who is looking at which particular document. The documents that contain sensitive information can be shared only at key moments, with key people.

A data room multiplies the chances of making a bountiful exit from your business, as your potential buyers can find the documents at their convenience. Also, a data room indicates that you are indeed serious about selling your business and want to keep the whole process as transparent as possible. By being more open with your documents and data, you are basically showing your confidence in your business and your respect for the requirements of your buyers. Your data room will be used by the buyer’s acquisition team, who may belong to finance, legal, and other departments. It can be hard to respond to requests from all these quarters if you haven’t  thought through and established a virtual data room and in the worst case scenario the deal could collapse with a nervous buyer if you were unable to provide the evidence in a timely manner.

In summary here’s why virtual data rooms are very effective during business sales:

  • More buyers become interested in your sale proposal when they know that you will provide them access to all relevant documents through a data room.
  • If you have given some time limit for bidding, having a virtual data room can increase the number of bids that you receive, as more people will be able to access your information, which is available 24×7.
  • You can have the knowledge about what your bidder(s) is looking at and understand the intentions better.
  • The business sale is accelerated as no time is wasted in requesting for and gaining access to the documents.
  • A virtual data room provides better control on data and the people accessing that data. You can apply digital rights management and prevent the documents from being downloaded or shared with unauthorised people.

So if you haven’t started getting your data room together now’s the time to do it and to help you, we’ve got just the thing that will make it easier for you and help you understand exactly what you need to do and what costs are involved, Creating the Data Room Pack which also includes a zipped up data room structure to get you started.

Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale

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What’s in a business sale teaser letter

business sale teaser letter

(Extracted from ‘How to Sell A Business‘ book)

Why write a business sale teaser letter?

The purpose of the teaser letter is to make the market aware that your business is ready to be acquired, should the right opportunity arise, and to identify potential interested buyers.

It is generally a two page document, which is written by your business broker (as one of their agreed deliverables for their fee) with your input, to showcase your business to potential interested parties who may or may not be actively acquiring businesses at this precise moment in time. The letter will most likely contain the following:

  • The broad type of business it is
  • Your headline financial figures (profit, revenue)
  • Reason for sale
  • Outline the opportunity without mentioning names
  • Specify what type of transaction you want, ie. full sale, investment, management buyout
  • Your broker’s contact details to request more information

The teaser letter should avoid stating an asking price or even a range. You don’t want to put someone off before it’s even begun. If you would like to see a teaser letter in all its glory, we have an example here.

Depending on the potential buyer’s organisational structure, your broker may make a call before sending out the letter.  The letter is normally sent directly to the managing director/chief executive, to the financial director, or to the acquisitions manager/director.

What happens next?

After sending out the teaser letter, your broker will follow up with a call to find out if the potential party is curious and interested and what attracted them to your business. This allows your broker to discuss the opportunity in more detail and qualify the interest of the potential buyer some more. If your broker is not familiar with the interested party, they will check up on the company’s financials and work out if they have the means to pay-out, as well as see if there is strategic value in the potential acquisition. If the party is still interested, the broker will send the potential buyer a confidentiality agreement (a.k.a. a non-disclosure agreement) to sign before releasing further details.


Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale

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How to Shortlist the Right Buyers to Buy Your Business

The Right Buyers to Buy Your Business

How to shortlist the right buyers to buy your business

Every year, thousands of businesses change ownership. Many of them are small ‘sized’ businesses, similar to beauty salons, cafes, restaurants, dry cleaners, quick-print shops, retail stores, landscapers, and tax advisory services to name but a few. And a handful are medium to large in size. Regardless of the business size, if you are looking for the right buyer to buy your business and desire to have the best deal possible, be ready to do a lot of preparation, planning and research beforehand, this will serve you in good stead.

Are you truly ready to sell your Business?

Regardless of what sort of business you have; be it a beauty salon, a certified services company, a retail store, or a home-based website that sells imported garden equipment, there is a good possibility that there’s an interested buyer out there (if the price is right). However, finding the right buyers to buy your business and selling the business on positive terms will necessitate planning and hard work by you – it will be worth it.

First of all, you must think about whether you’re really prepared to sell or not. To make the most of the opportunity you need to be prepared and understand  the business sale process and market trends. Know how to prepare your business for sale, how to set a realistic value, how to find prospective buyers, negotiate your sale, understand the paperwork and finalise the sale purchase agreement. Make sure you protect your business sale interests by pre-qualifying potential buyers.

Selling a business entails know-how of diverse areas as the process of selling a business is full of potential pitfalls. Business owners must be confident enough that they are making the right choice and decision by selling their business to get the best price, given current circumstances and their realistic interests. Make sure that the fact that you are selling is not an unintentional response to the receipt of an alluring offer. Even if an enticing high offer has landed on the table, check it out first and qualify it before giving into the enticement easily as you could be led down a garden dead end path.

Potential buyers – weeding out the time wasters

When you are sending out your business sale teaser letter and trying to lure in buyers through advertising or word of mouth, you may receive many responses from interested parties that are not the right buyers from your point of view. Talking to too many unworthy buyers may delay or even stall the sale and your time is precious so don’t waste it. The method of selecting the right buyers for your business is called pre-qualification. Professional business brokers generally do this job of short listing the right buyers to buy your business, but if you are planning to do it yourself, you must have your pre-qualification plan prepared. Don’t be surprised to find that 90% of interested parties won’t have the purchasing power to buy your business. We came across that 90% during our business sale process.

Maintain confidentiality throughout

If you are dealing with too many buyers, its difficult to maintain confidentiality and your sensitive business information may be visible to more people than you may feel at ease with. Consequently, by not satisfactorily screening out inappropriate buyers, you risk exposing your business secrets that may possibly have a harmful consequence on the potential financial performance of the business.

Shortlist the right buyers for your business

You need to recognise the significance of choosing the right buyers to buy your business. The right buyers should have the following qualities:

  • You have verified that they can afford to purchase your business
  • You believe that they want and need your business ie. they realise its value
  • You believe they won’t waste your time
  • You believe they won’t disclose sensitive data to others

It’s worth saying twice, make sure that the potential buyer has the financial capability (cash!) to pay for your business, in full, today.

A business sale can be an exhausting process (it was for me!), make sure that you relieve some of that pressure and stress by being prepared and shortlist those potential buyers through qualification. Become familiar with the business sale process, know how to whittle down the buyers list, learn about the pitfalls and how to avoid them – its all covered in my How To Sell A Business eBook.

Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale

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How to visualise your bountiful business exit

Visualise your bountiful business exit

Bountiful_Harvest_1440x1080Visualise your bountiful business exit, it’s worth it. Einstein considered imagination to be more important than intellect. Before doing an actual experiment, he would visualise the experiment in his mind, thinking about each and every detail and the whole sequence. As a result, he was prepared for the minor or major problems that he could encounter during the experiment. Establishing your business takes a lot of effort. It is only fair for you to consider a bountiful exit when selling your running business. However, like everything else, a business sale also requires a proper strategy. If you are well prepared, your business sale will conclude smoothly, with maximum returns for your hard work. The best way to be prepared for a business sale is to visualise successful business exit.

Visualising the Solicitor

A good advisor can make the difference between a successful or stalled business sale. Apart from looking at qualifications and experience, you should also visualise yourself to be working together with your solicitor —preparing a sales pitch, drafting a Memorandum, finalising Heads of Terms, and most importantly, negotiating. Try to imagine what working with your advisor will be like. This will help you in choosing the solicitor that you feel most comfortable working with.

The solicitor I chose was a word of mouth recommendation. When we first met, he spent quite some time with me outlining my options, explaining the process and cover potential costs. During our discussions I felt that he was genuine, straightforward and able to help me get what I wanted. As the sale process progressed I often visualised leaving my solicitors office with a big smile. And towards the end I pictured myself hugging my solicitor (and he’s not really the huggable type)! Looking back now, I remember the day clearly when I got up from the boardroom table, concluding the deal and wraping my arms around my solicitor. What a great day!

Visualising the Sales Pitch

The sale proposal is the first thing that you are going to need. It is also known as a Memorandum of Information. The memorandum should be prepared very professionally and should be a lucrative document for the buyers. It should emphasise the strengths of your business, and underplay the weaknesses. But, everything should be done artfully. You can improve the impact and quality of your  document by adding graphs, charts and other data that looks credible. Try visualising that you’re that the buyer rather than the seller. Think about the points that you, as a buyer, would like to see in the Memorandum. Your solicitor will also give you valuable advice, but it’s you who should be calling the shots rather than just towing the line that your solicitor gives you.

Visualising Meetings

You’ll be required to attend many meetings with the buyer’s team, during which you’ll be asked to explain different parts of your business. Before the pre-completion day, there may be a number of negotiation sessions to finalise the prices, payment terms, and other terms and conditions of the sale. Visualising each such meeting beforehand will make you better prepared to handle them.

Never show that you are desperate to sell your business. In fact, you should give the impression that there are other buyers also interested in buying your business. Remember that a delayed sale is usually a declined sale; therefore, you must do everything to speed up the sale process. Do not be available for meetings too readily. It might make the buyer think that they are the only party interested in your company. Rather, schedule appointments for meetings and inquire about the agenda beforehand. Some companies launch a media campaign just before they send out a sale memorandum, so as to improve the image and the potential price of their business. Visualising a successful business exit is about visualising each one of the activities right until the pre-completion day point.

Visualising Negotiations

For negotiating the terms and the price, you should first sit together with your business sale team and your business broker. Brainstorm your priorities about the price, and know the limit to which you can show flexibility to. Identify the weaker aspects of your business and be ready to answer tough questions. Remember, that your buyer will focus on the weaknesses of your business in an effort to reduce the price. You should be prepared for the counterarguments. You can either focus on your strengths and show that they offset your weaknesses, or you can find ways to underplay your weaknesses and convince the buyer that the price that you are demanding is profitable for them. Visualise negotiations always ending on a positive note where both you and the buyer walk away satisfied.

Visualising Indemnities, Warranties and Representations

The most sensitive aspects of a business sale are the representations, warranties and indemnities that you provide in your documents. A representation is a statement about a certain fact or aspect of your business. By giving a representation, you are taking responsibility that the information that you are providing is true and authentic. Similarly, the warranties that you issue are assurances about some aspects or assets that they have been correctly stated. Any wrong information from your side for which you have provided a warranty, will put you in the breach of the sale agreement. Indemnities are also similar; however, while indemnifying your buyer, you are taking responsibility to compensate the losses that the buyer may suffer in case a particular term of the agreement is breached by you.

Before issuing indemnities, warranties or representations, you should visualise the ramifications of issuing these documents or including these clauses in the sale agreement. It is best to keep the warranties and indemnities to a minimum. And when you do have to issue them, make sure that they should not keep troubling you even after you have sold your business.

Finally, you can visualise having a vacation at your favourite destination after you have successfully exited from your business. Do this from the start!

If you’re approaching an imminent completion day, have a look at our  Completion Day Checklist. It’s provides everything you need to know and do for the big day.

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”

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The business sale process in 6 steps

6 Steps in the business sale process

There can be many reasons behind your decision for a business sale in the UK. Selling your business might seem simple in theory, but is one of the trickiest feats to accomplish when it comes to formalities. Here’s the step-by-step process for a business sale, along with suggestions about how to make it all go smoothly and profitably.

Step 1: Your Human Resource

Human resource is the backbone of your business. It could be in the buyer’s interest to retain at least some of your human resource for the long term. A business sale gives you the opportunity to get rid of the non performers and make your business more profitable to the buyer. But you may feel that you have an obligation towards your good employees and should afford them every opportunity to continue their careers in or outside your business. Don’t forget the TUPE Regulations as it may also put you under some legal obligations when completing your business sale.

Step 2: Information Memorandum

Your business broker will prepare an “Information Memorandum” (MOI) on your behalf, outlining all relevant details about your business and your intent to sell your business. The Memorandum is like the blueprint of your business. It informs the potential buyers about all aspects of your business that might be of interest to them. We have a MOI sample table of contents on our Free Document Samples section of our website here.

Include a snapshot of your company’s finances along with projections for the coming years. The business’ financial health allows them to determine the fair price at which they should buy your business. Buyers will also like to know your key staff members and business processes —how you procure materials, how you process them, and how you sell them. They would like to know the number of people you employ, the number and locations of all the outlets or offices you have and the activities that they are used for.

A good Information Memorandum should project your business in a very good, desirable light and make it attractive for the buyer.  And if a potential buyer is the competition, you may choose to provide a different MOI or provide it to them at a later date when you are sure that they are serious contenders for buying your business.

Step 3: Offers and Due Diligence

Once an indicative offer has been received and you accept, your prospective buyer will scrutinise your documents (via a data room) for a few weeks or months before making you an offer. Remember that an offer is just an offer unless it is supported by the other party’s ability to pay. You have the right to find out and confirm that the buyer can afford to pay, this is normally done by your business broker.
Don’t be desperate for a sale, and even if you are desperate, never ever show it to the buyer. Don’t take any offer seriously until you are satisfied that they have strong intent, have the means to pay and its a good offer.
The offer you receive should be comprehensive and detail what the consideration is and when payment will be made. The buyer may also include an earn out element that ties you and/or other key staff members for a defined period after the business has been sold.

Step 4: Negotiations

Before both parties finalise all the details, you must negotiate the terms and price of the sale with your buyer. This will take place over a number of days and weeks. Negotiation is an art form and you and your business sale team must be fully prepared at all times. This is where your business broker starts to earn their money. Make sure you agree on your negotiation strategy ahead of time. Know what you want, what you are willing to give up and what’s non-negotiable.

Step 5: The Sale Purchase Agreement

Your advisors and legal experts will sit together with your buyer’s acquisition team and draft a detailed Sale Purchase Agreement (SPA) which will include all the terms and conditions that you finalised during your negotiations with the buyer. Make sure you provide accurate information, because this is a legal document, and anything that is proven wrong after the sale has take n place will be held against you.

Step 6: Completion Day and beyond

On Completion Day, expect the ‘day’ to be quite long and you may very well still be negotiating as the day progresses. Make sure that you and your business sale team are focused on getting across the finish line which is marked by having signed all the paperwork and the solicitors agreeing on both sides that the business sale is indeed ‘completed’!  Allow the moment to wash over you, it really is an amazing achievement. Then its time to get back to business and deal with how the news is going to be communicated and start earning that earn out if you’ve got one!

Joanna Miller helps business owners navigate their way through the start to finish process of selling a business.  Her specialty is helping owners understand how to prepare and make the most of their business sale process to maximise their company’s value. To understand how you can sell your business quickly for the highest sales price, purchase her book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale

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Top 5 tips when starting a new business all over again

Top 5 tips when starting a new business all over again

Starting Over AgainStarting a new business all over again? What about your existing business? There can be many reasons for selling a business. It may be that you have realised that you are in the wrong line of business, and would like to switch industries. Or, you might have realised that your business is not performing as expected, and you would rather sell your business while it’s still making some profits. After all, over 50% of business start ups go under in the first five years. And, if you are lucky, you have a business that’s roaringly successful, and you would like to cash in the good will and start up a new business.

Start-up business owners usually have little experience of managing their own business. After they have done it for some time, the level of their awareness about the market and the industry is improved. Two years down the line, their vision improves significantly and they can spot opportunities better. For instance, let’s say you have a website that’s also making money. However, by virtue of your experience, you know that another niche is driving more traffic and could deliver more profits. You can always dispose of your existing business without making a loss, and hopefully for a big profit, and start a new business that appears more lucrative to you.

Here are five tips from highly successful entrepreneurs to guide you through the business-switching process.

1. Do Not Jump the Boat

Switching between businesses is like switching between boats. If you jump off one onto other, there are chances that you might end up landing in the cold water. Do not try to start a new business while you are still running your old one. This will require you to be disciplined in your thinking and actions. Once you are focused on a new business, you may get distracted and your old business may suffer in the process. You might not be able to concentrate on the sale of your old business and may lose money selling it a in a hurry. Also, your new business might also suffer because you would not be devoting full time and attention to it. The key is to do one thing at a time. Once you are convinced that you should be going for a new business, concentrate on selling the old business first. This will free important time and financial resources that you can devote to building your new business start up.

2. Devote Time and Attention to Planning

Starting a business is a difficult decision to make. It’s not something that you do in haste. It’s better to devote proper time and attention at each and every stage of the planning process. If, and we don’t hope such is the case, you are regretting to be in a certain line of business, it might be because you did not make a great plan. Dreaming is okay, but your dream must translate into facts and figures through careful planning. How will you finance the start up business costs? What will be your marketing plan? How will you manage the workload? What are your goals in 1 year? 3 years? What is your vision of your business? These are all questions you must ask yourself, and do not move ahead until you have put down every little detail into your laptop.
The problem here is, for many people who are looking to sell their business and venture on a new start up business, there may not be enough time to plan. Urgency may exist because the old business might be consuming too much time or returning too little profit, or both. Under such situations, do the best you can to make the transition smooth.

3. Evaluate the Business you are looking to Start

You’ll need to be 100% sure that the new business that you are looking to start is not all glitter and no gold. Remember that the grass always seems greener on the other side. So, make sure that you talk to a few people in your new line of business. Gather facts and figures about your target market. Evaluate whether the market would be growing in future. You should be careful not to get caught in a fad and be left high and dry when the excitement of the fad runs out.

4. Keep Marketing in the Centre

SMEs are at the centre of the British economy, providing over fifty-nine per cent employments in the country. At the centre of any successful SME, though, is a robust marketing strategy. Marketing is around what your new business should be built. You should start by profiling your target market. Think about the need that your product satisfies; then, think about the people who have that need. Ask yourself: what do my customers do to satisfy their need at present? How can I make a difference? That’s where marketing starts. From there onwards, you should think about the media that your customers watch, the places that they go to, and the product attributes that matter to them. After you have achieved clarity about what you need to do, focus on “how”. Think about the skills and resources that you’d require in order to meet the needs of your target market.

5. Learn from Your Old Business

Apply the learning from your old business to your new business. As Einstein said, “insanity is doing the same things over and over again, expecting different results”. You should be doing everything right the second time. However, you’ll need proper monitoring and constant evaluation of your performance in order to be able to apply corrections to your business strategy. Make sure you have a system for monitoring and evaluation in place in your business plan.
Lastly, (but as a matter of fact, firstly), you need to sell your old business profitably. This should be your priority, because you want to capitalise on the time and the efforts that you have invested in your old business.

Business start up is not easy to set up but you’ve done it once before so it should be easier the second time around!

Kim Brown, Co-Founder of Business Wand, helps business owners navigate their way through the start to finish process of selling a business. Her specialty is to help owners cut costs and increase profits prior to sale. To understand how you can sell your business quickly for the highest sales price, purchase the book, “How To Sell A Business: The #1 guide to maximising your company value and achieving a quick business sale”