Get ready to sell your business
Assess offers to buy your business
Price is just one factor to consider when weighing up offers for a business. For example, the potential buyer's proposed timetable for completing the deal is important - as a drawn-out sale could be damaging to your business.
Proof of finance
You also need to be sure the prospective buyer can meet the price they're offering. The offer will be worthless if they can't finance it. Examine what proof of financial backing they have - this could include mortgage or loan agreements, share certificates or evidence of personal savings.
Payment options for selling your business
Consider how the deal will be structured. A one-off cash payment may be the most appealing option, but it's possible you'll have to accept some form of deferred payment. An upfront payment may not be the most tax-efficient option, either.
You may be offered a combination of cash and shares in the purchaser's business. But it's really only worth accepting shares if they're in a quoted company. Your buyer might also prevent you from selling your shares for some time.
If you are offered deferred payments, establish whether or not they are guaranteed. Buyers may want to lessen their risk by making future payments based on the business' future performance - known as an earn-out.
While earn-outs may increase the final amount you receive, there are inherent risks and you may not receive as much as you expect. Continued management involvement can enable you to influence the meeting of the performance targets. But you may decide that you no longer wish to be involved in the business once you have sold it.
Tax issues when selling your business
Remember that you're likely to have to pay Capital Gains Tax on the sale of your business. Speak to your accountant to discuss how you can minimise your liabilities for Capital Gains Tax and make the most of the reliefs available.