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Always treat your business finances and your own personal finances as separate entities

business finances

Have you heard of the expression “Don’t put all your eggs all in one basket” ? Well, now you have. That’s when you make the mistake of treating the business as your own. And yes, I wrote ‘mistake’ on purpose. Don’t fall into the trap of mixing what is personally yours and what the business finances are into the same basket.

You need to distinguish between the two. You and the business are different and separate entities. Yes, you may be the 100% shareholder of the business but that doesn’t mean that you should treat it as part of the family. You should be looking at your business as an investment, and with all investments you should expect a return. Returns should be cashed in and then you decide whether it would be better off somewhere else (diversifying) or worth putting back into the business.

If you lend the business money, make a record of it so the business can pay you back. And if you spend on behalf of the business, keep the receipts so you can claim the business expenses back, so that you’re not out of pocket at the end of the day.

So remember, your business finances is an egg not the basket. It may be a big, fat, juicy, golden egg but it’s not the whole basket.

Your actions:

  • Make sure that you aren’t funding the business using your own money without a record of it being a ‘loan’, be that a business loan or actually an expense which you then claim back
  • Use petty cash and keep receipts so that you can be paid back for business expenses
  • Start drawing a salary / dividend from the business (pay yourself first)
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top 10 tips when selling a business

top 10 tips when selling a business

I was asked recently for my top ten tips when selling a business on a back of a napkin! so here they are, in super short napkin format though much more readable!

Top 10 tips when selling a business

  1. Keep it simple and squeaky clean.
  2. It’s all about the numbers.
  3. Sales and forecasting counts.
  4. Have a Finance Director (FD).
  5. Don’t give them ANY reason to be chipped, ever.
  6. They have to want it. They are buying for their reasons not yours.
  7. It will never go how you want, expect the unexpected.
  8. It’s always a negotiation.
  9. Plan ahead.
  10. Have great professional advisors. Use them as that’s why you are paying them.
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Ready To Sell Your Business: Now What?

ready to sell your business

So you’ve built your business and now you’re ready to sell your business and you think you are ready. Are you really ready? Have you considered everything yet? Here are four crucial areas that it’s worth considering very closely if you want to maximise your business exit.

Make yourself redundant.

If you’re still at the centre of the business and finding that everything and everyone revolves around you – that’s not good. The business needs to function without you being at its centre so start stepping away from the day-to-day decision making and trust your employees who you have hired to do the job do it! If you find that you are micro-managing because of fear, loosen the reins and let your employees take the lead. If they don’t perform, there are always better people out there. It’s a question of finding them and making sure that you end up with a performing team with you out at the front, leading. You job will be to sell your business at the best deal you can.

Numbers. Numbers.

The price you’ll get for your business maybe a multiple based on income eg. three times total revenue so make sure that when you present your numbers that they are accurate and your forecasting (generally three years out) is realistic, especially if you stay on in the business because you’ll be asked to smash through those forecasted numbers!! Make sure that your team know what they are aiming for and get their buy-in to achieving those numbers. Your aim is to get a huge slice of the bigger pie so reward them for performance.

Cash is king.

Grow your top line – your revenue. Focusing on revenue will easily prove that the business is growing and will continue to as new sales comes in. Of course, don’t forget to review your cost lines and see if you can squeeze more out for less without compromising or introducing problems elsewhere in the business.

Think like a potential buyer.

Put yourselves in a potential buyers’ shoes and try and look at your business through their eyes. Do you know what unique selling points the buyer’s love? What are the business’ strengths and where are the weaknesses? Tighten up on those, eliminate them where you can. Make sure that you don’t give the potential buyer an excuse to delay or walk away because they found something that you should have first. Instead, you should be making sure that they can’t wait to give you an offer and close the deal as soon as possible.


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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Interview: Yes! You can exit your own business

exit your own business

After Kim’s interview of myself and my business exit story, it was time to switch roles and it was my turn to become the interviewer in order to be able to share Kim’s story with you. Kim’s exit from her business was different to what would be perceived as the norm and shows that business owners, even with business partners, can change their circumstances from within and successfully exit their own business. Read on to discover the difference!

Joanna: What was your original business exit plan?

Kim: Originally I didn’t know I had the ability to exit my company. For some reason I felt as if I had to keep it until I died. I know that probably sounds silly, but I felt trapped in my business and thought people would think I was ungrateful for wanting to sell it or leave it. To further complicate things, my business partner and joint shareholder was happy to plod on for an indefinite period of time. I felt stuck. I loved my company and was very proud of what I created however I was board stiff. I wanted to do something else!

Joanna: So what triggered your desire for a business exit?

Kim: While attending the Business Growth Programme at Cranfield University I not only realised that my company was very valuable but I also learned that there were several ways for me to exit. During a dinner with my counselor he asked me what I really wanted to do with the business and my response was to ‘get rid of it or find a way to get out of it.’ It was the first time I aired my feelings but I felt as if I had nothing to lose. My counselor didn’t have a vested interested in the business so I felt free to talk openly. His response was, ‘what’s stopping you’? For the first time in years I felt as if there was a light at the end of my tunnel. Right after that conversation I was referred to a lawyer and he outlined various options.

Joanna: And how did you find the process emotionally? 

Kim: The process was the hardest thing I’ve ever done in my whole life. Even though I wanted to desperately get out of my business exiting was heart-wrenching. I cried. I screamed. I felt sane one day and insane the next. After eight years of growing a company from nothing to something I found it massively emotional. The negotiations had me up pacing through the night. My thoughts were all over the place. I wondered if I’d get the amount of money I felt I deserved. It seemed as if time stood still and things weren’t progressing fast enough. I felt anxious, nervous and afraid to even contemplate that I’d be able to get a large sum of cash and walk away. On top of all the negotiations there was also dealing with the tax authorities, lawyers and keeping things quiet from the employees. Just typing this now reminds me of how atrocious the process was for me. Furthermore, I felt as if I was going through a divorce with my business partner. We spend 8 years building something amazing and I was telling him I wanted to go my separate way.

Joanna: So what was the final outcome?

Kim: My business partner didn’t want to sell so after three ‘Considerations,’  I agreed to sell my partner 40% of my shares and grant an option for him to buy the remaining 60% of shares within a certain amount of time. The 40% payout was scheduled to come to me over 2 years with the remaining option to follow if my business partner wishes to exercise it. I was able to quit as an employee and resign from the Board of Directors. Luckily, I was able to walk away quite quickly and within three months the deal was signed and the money started to come my way. I felt that the deal struck was fair and I’m pleased to say that the relationship between me and my ex-business partner is on good terms. I’m ecstatic about the outcome and don’t have any regrets. It was the hardest thing I’ve ever done, but it was well worth it.

Joanna: In hindsight, what are the top 5 things would you have done differently, if anything?

Kim: I don’t think that I could have done anything differently other than learned how to relax more. I felt so anxious and worried when I really didn’t have to. But I suppose that applies to anything in life!

So there you are, here’s actual proof that no matter how stuck you feel as a business owner, there is a way out and you too can exit your own business. It may take someone from the outside to help you realise it but see, it is possible. If you are in a similar situation to what Kim’s was but have yet to verbalise it or do anything about it, perhaps after reading this it will spur you on and you too can exit your business and find the joy in life again.

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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3 questions that all business owners always ask when selling their business

questions when selling

Questions when selling

Besides the super obvious question asked when selling a business – ‘How much is my business worth?’ to which there is no straight, easy answer, here are three other questions that we get asked by business owners all the time – along with our answers.

Q1: If I am thinking about selling my business, when should I start planning?

It’s never too early to think about selling nor to start planning. Ideally, you should have a 2-3 year plan to allow yourself time to get the business ready for sale. It’s like selling a house; you need to invest a bit of time, money and effort to get it looking its best to attract the right buyer. The market cycle does matter, as does the time of year. You need to have plenty of patience and plan well and accurately in order to maximize your business’ value.

Q2: What should I be doing to prepare my business for sale?

In a word, everything! Make sure that everything is in order and above board, especially your finances. So, know your numbers. Protect your business and have signed customer contracts where possible. Also make sure that your sales forecast is accurate and that your historical figures back up your story and you hit those numbers. Look at your business as if you were the potential buyer and plug all those holes that you may have.

If you’re looking to improve the bottom line to make yourself more attractive to potential buyers, implement efficiency changes. These need time in order to happen and to make a positive impact on your bottom line.

Q3: Do I have to use a broker to sell my business or can I sell it myself?

It really depends on your business and what you personally want to do. For smaller businesses, under $1m, the traditional brokerage fees or boutique firms can be uneconomic for you especially as some brokers charge an upfront flat fee plus a percentage on successful sale of the whole value. However, there are a number of brokers who will work on success-based fees and can be worth it as they help you market your business to a wider audience.

Are you sure you are the right person to spend time trying to sell the business? Can you afford to spend time on selling the business? You may not have the time as you are already doing a 12 hour work day and juggling numerous balls – don’t forget those forecasted numbers need to be achieved too.

Getting the word out will be expensive too as well as time consuming. You also may not have the reach nor the right connections, brokers subscribe to online business sale marketplaces and this may be an effective cheaper way to market your business for sale than if you were to go direct to one of online business sale marketplaces as they are quite expensive to list on – think $150 per month!

So it could pay to have the right broker ‘seal the deal’ for you.

Bear in mind that the process of selling a business is unique and there is no fixed blueprint that can be used to make the business sale process go like clockwork. There are just too many ever-changing factors involved. And most of those are outside your control. Rest assured that we are here to help demystify the process, reduce your risk, help your odds of getting what you want from your business sale and make sure that you are asking the right questions.

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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Why signed client contracts are gold dust especially during a business sale

client contract

When you win a new piece of business, having clients sign a contract with your business should be part of your everyday operational procedures. After all, you and your team have done the hard work, which is winning the business in the first place.  What’s some paperwork compared to that?!

Speaking from personal experience, you will generally find that the paperwork trail is left to the last minute and can be easily forgotten about as now the business is busy making sure that its going to deliver it. Sometimes the paperwork gets lost or the contract is drawn up and then gets lost in legalese for months on end.

Whatever the reasons, make the time and ensure that you have signed client contracts. It will be worth it as it helps keep your business valuation up. Buyers love to see signed client contracts, it’s practically an annuity stream. You should love them too!  They simply are gold dust as they help with forecasting revenue and unless something goes horribly wrong – guaranteed income.

Encourage contracts to be drawn up and signed

Make contract signing part of new business process and take a proactive approach. You could offer the sales person an incentive / additional commission / bonus for getting the contract signed within a certain period. If that’s not quite right for your business as contracts are handled by your financial controller or a contracts manager then make it clear what timeframe contracts need to be signed in and manage it. Hold a monthly review where you check on the progress made. The longer you leave an unsigned contract, the harder it will be to get it signed because of i) amount of time lapsed  ii) change in personal – oh, Fred no longer works with us and I’m not sure what you agreed with him…

You may want to record the different ‘stages’ of contract signing so its easier to mark progress made. Here are some example categories where the total count for each would be presented. The information can be further drilldown on as needed:

  • Unsigned (no info)
  • Unsigned (awaiting internal review)
  • Unsigned (on hold)
  • Unsigned (reviewed, awaiting internal signature before posting)
  • Unsigned (posted, awaiting client signature)
  • Signed (by client and scanned to filesystem)

Of course, there may be the rare occasion where an unsigned contract works in your favour. For example, there could be a price reduction based on increased volumes – which only comes into effect with a signed contract. But you should have worked that into your financial model at the outset and be able to bear the reduction in your profit margin. (In other words, that’s a poor excuse for not having the contract signed!!)

All my client contracts are signed – anything else?

If you’re reading this thinking ‘all my client contracts are signed’ give yourself a huge pat on the back. But that’s only one part done before you start celebrating, are all your supplier contracts signed too? And have all your signed contracts, suppliers and clients, been scanned and available electronically for the data room?

And that’s not all….

As well as having your signed contracts signed, do you have all your client contract key details in a single place for a quick and easy reference? Key contract details include:

  • The client’s name (!)
  • Is the contract signed or not?
  • How long is the contract for?  1 year, 3 years
  • How and when does it expiry?
  • Extension terms
  • Pricing
  • Tier

Our Contracts Summary Template has all this key information in a spreadsheet and as such as will help you manage your client contracts better and you will be in a position to answer these questions as well as being proactive in retaining the business when it comes up for renewal or extension (on the basis that you still want their business).

  • What revenue does the contract bring to the business?
  • Is the client one of your top 3? Top 5?
  • Are there any price changes during the contract lifetime and are the finance team aware of it?
  • Do you know when your next 3 client contracts are due to expire?
  • Does the contract need something in writing by a certain date in order to extend it for another term?
  • Which contracts aren’t signed yet and why not?

During a business sale, you want to make sure that none of those signed contracts ends. So, do a deal to secure its extension, remember it’s going to impact your business sale price.

If a contract does ends, don’t lose any of the original details and keep a record of that too along with why it couldn’t be extended or renewed.

It’s worth spending time on contract gold dust especially when it has a direct impact on how much your business is worth to a potential buyer so start reviewing the state of your client contracts today!

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 grow and possibly exit your business with your sanity intact

Exit Your Business

Over 75% of business fail within 10 years

According to the U.S. Small Business Administration, approximately 50% of all new businesses survive five years or more and about one-third last 10 years or more. That means that only 25% of businesses last for longer than 10 years. Yikes!

Considering the high rate of failure, wouldn’t it be in every business owner’s best interest to consider an exit plan within 5 years or 10 years at most? Seriously – to beat the probability of failure doesn’t it make sense to set up a business with the sole intention of selling it before it fails?

I might sound a bit cynical here but let’s face the facts – you have a 50% chance of being around after 5 years and your probability for success diminishes the longer you own your company.

Is it possible to create a company for the sole intention of selling?

Starting and growing a business myself, I know first-hand that there’s simply not enough time to grow a business and consider an exit plan. When I first started, my plan was to build my company for 3 – 5 years and then sell it. After 8 years of work, work, work I consider myself lucky to have been successful (financially – not mentally!) yet the company was in no shape to sell. Fortunately for me, I exited through a management buyout; otherwise I fear I’d be in the loony bin right now. I loved my company, but I was so tired of running it.

The gurus all say to start with the end in mind. They highlight the importance of planning an exit before you start, yet it’s hard enough to plan a forecast for 12 months. Things change so quickly – technology helps or hinders your business. New regulations are forced upon you. Recessions hit.  And of course, business owner life gets in the way – income targets need to be met, salaries have to be paid, HR issues have to be managed and the plates have to keep spinning.

It’s not about thinking with the end in mind (which could be to exit your business) – it’s more about thinking how to reach the end with a mind!

How can you grow your company, exit your business and keep your sanity?

I think there are several solutions to reduce the likelihood of business and/or personal failure, so all is not lost.

  1. If you haven’t yet started (or are just starting) a business, make darn sure that you’re super passionate about your product/service in addition to running a company. I’m positive that many businesses fail because business owners are chasing money rather than creating an offering that they truly feel passionate about.  Every business owner that I know that’s had a business over 10 years absolutely loves what they do. (I admit it, I chased the money, I had very little passion for the product/service I offered.)
  2. If you currently own a business and are getting tired of it, it’s only going to get worse, so start thinking about an exit now! There are so many things that can be done. You can pull yourself out of the business while teaching others to run it, you can consider succession planning – setting up family member to take over or perhaps getting it ready to sell. The key here is don’t wait until you burnt-out.  (I admit it – I waited until I was burnt-out and it wasn’t a pretty sight).
  3. Don’t pretend that you’re happy. In today’s age of positive thinking we business owners give ourselves pep talks all the time. We tell ourselves we’re happy, we’re successful, and we’re the rulers of our own dominion. Additionally, we feel a pang of guilt to admit we’re unhappy with our situation. Heck – who are we to complain? We’re our own boss, we control our pay check, we can come and go as we please. It took sheer determination and tenacity to get our business going – we can’t allow ourselves to think we’re not happy about the destination we’ve created! Can we? You can only pretend for so long. Sooner or later you’re going to have to feel the truth. (I admit it – I pretended I was happy. Everything in my world was smiley faces. It wasn’t until one day when a mentor asked me what I really wanted and my response was, FREEDOM! Up until then I was kidding myself).
  4. Learn the art of outsourcing and delegation. Most business owners, especially in the early days, think that no one can do the job they do as good as they do it. You’ll hear them saying, ‘I wish I could outsource this but it’s quicker for me to just do it myself. Furthermore, it will get done correctly.’ If you say these kinds of things, treat them as a massive warning! You cannot grow and eventually exit a business if you don’t remove yourself from the running of the business. To remove yourself from the running of the business, you must delegate or outsource. Growth is now about you working hard – it’s about you working smarter. (I admit it – no one could do anything as good as me, therefore I found it impossible to delegate. This in turn created a situation where I had to work longer hours and become more and more miserable).
  5. Take the time to understand what is truly important in life because if you think it’s your company, you’re on the wrong track. Our culture is so geared towards making money and owning houses, boats, cars and gadgets yet none of that makes our heart sing. Yes – money is important, but once you have ‘enough’ more money doesn’t make life better. The most important thing in life is love – it’s giving love and receiving love. And I’m talking about love from humans – not the love you give your company! When you’re on your death bed you’re not going to reflect back and wish you worked harder or earned more money. Relationships with your friends, family and community around you is what really matters. Whether your business fails or succeeds I can guarantee that having loved ones with you for the journey will make all the difference in the world. (I admit it – I was married to my company. Nothing else mattered. My friends were my employees. It wasn’t until I exited that I realized how removed I was from the most important things in life).

So there you have it. That’s Kim’s take on growing, exiting and staying sane through your company journey! Any comments? I’d love to hear your thoughts?

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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Taking The Leap – Going From Hating Your Company To Exiting It

Exiting My Business

Exiting My BusinessGoing From Hating Your Company To Exiting It

Deciding to exit the business I painstakingly grew for 8 years was the hardest decision I’ve ever made. And my decision certainly didn’t happen overnight – it was a drawn out painful process that took several months to make. And once I finally decided to exit it took over a year to process all the emotions I cycled through.

The emotional investment to my companies was similar to raising a child. I put all my energy, love and attention into doing the best I could. And to say good-bye was heart-wrenching.

I had so many conflicting feelings. I was so full of ‘shoulds’. I should be happy that I own and work at my own business – but I wasn’t. I should feel free, happy and alive, but I felt confined, miserable and lethargic. I should be grateful that I’m increasing my wealth yet I actually felt angry. I felt as if the troubles I endured weren’t worth the payment I received. In fact, I eventually came to the conclusion that no amount of money was worth the journey I was travelling.

My health was declining, my energy levels were getting lower and my relationship with everyone around me was suffering. I had built a successful business but it wasn’t successful in relation to who I was and what I truly needed.

In my quest for ‘success’ I mistakenly thought that financial freedom had to be obtained by sacrifice, hard-work and massive amounts of will power. I was taught that things don’t come easy – you need to get out there and do whatever it takes to make things work. I forced, cajoled, pushed and kicked my way to ‘success’ and now that I’ve exited I look back and think, ‘what the heck was I doing?’

No – it wasn’t all bad. I enjoyed the creative side of things. And I enjoyed all the marketing elements that I designed. There were some very special parts that I’ll always hold dear, but as a whole, my businesses ended up confining me rather than setting me free. That’s my fault. I created things to happen that way – I just didn’t know I was doing it.

When you’re so stuck in the mud it’s often difficult to see that life can be lived another way. Deep down inside I knew that I needed to get out. I needed to raise myself out of the mud but I was so scared. And I felt so alone. There was no one around to empathise. And for me to leave my businesses I also had to leave my business partner. Or at least put an end to our working relationship. My decision not only concerned my working life but also it meant I had to ‘divorce’ someone I was very close to.

But before taking a course of action things had to get so bad that I had no other choice. I became increasingly frustrated, angry and disillusioned. I felt as if I lost touch with everyone around me. I could feel my health get worse – I had already ended up in the hospital and took months to recover. I was going down and I had to exit before something serious happened.

Luckily I had some new friends that helped me make my decision. I announced to my partner I was leaving and then lived in a self-imposed hell for several months. I felt as if I was letting myself and everyone else down. I couldn’t tell the employees so I carried on pretending to be a ‘leader’ while the legalities were worked out.

Every other day I woke thinking ‘what am I doing’? I’m throwing away everything I’ve done and created. I’m walking away from the only life I know. And then I’d eventually remind myself that I needed to break away. I needed to find another way to live.

I was so alone. Or…at least, I felt so alone.

It’s now been a 1 1/2 years since I left and taking this time to reflect I’ve realised that my decision was a monumental milestone in my life. I had my ladder of success against the wrong wall. I was doing things that I thought were necessary to create success but I was so misguided. I’ve now realised that I don’t have to push, prod and force myself to gain an elusive reward in the future. I can actually flow, love and enjoy want I do now AND be rewarded. What a concept – eh?

As we get older we get wiser. I’ve learned so much over the past several years. I’ve learned that if you’re not enjoying the journey you won’t like the destination. If what you’re doing now isn’t working for you, don’t invest any more time or emotions into it. Get out. Switch direction. Figure out what does work for you. The longer you wait, the harder it will be to transition . And if you wait too long, something will force you to change. It’s better to voluntarily make the switch rather than it being made for you!

And if you say, ‘but I have a family to support – I can’t just jump ship.’ Well – when I made my decision to exit my business there was no certainty I would get an income. I quit my businesses without knowing if my business partner would buy me out or pay dividends. For months I moved forward not knowing how I was going to make money. And I am the sole provider for my family – I support my husband, my daughter and my father-in-law.

As luck or destiny would have it, my business partner agreed to pay for 60% of my shares over 2 years providing an income and time for me to figure out my next move. Things always work out. If we don’t take care of ourselves, we won’t ever succeed personally. And to take care of ourselves, we need to trust that doing so will create the best outcome for everyone.

Has the time come for you to exit? If yes, you’re not alone!

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 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