Frequently Asked Questions

Why should I use an adviser when selling my business?

When selling your business, you have two primary options: manage the sale yourself or hire a professional adviser. To determine the best choice for you and your business, it's essential to weigh the pros and cons of each approach.

While hiring an adviser involves a cost, the right professional can add significant value. Selling a business can be highly stressful, especially as you must continue focusing on running it effectively during the process. An adviser can alleviate much of this stress by marketing your business to qualified buyers, managing negotiations, and overseeing the legal aspects of the sale.

Although selling a business is often a lengthy process, working with an adviser can help expedite the sale. One of the most time-intensive tasks is identifying the right buyer. Experienced advisers typically have access to a network of potential buyers and understand how to market your business to attract the most suitable prospects efficiently.

How do I get my business valued?

Valuing a business is a challenging task. While some companies may offer to estimate your business's worth using broad criteria like the industry you operate in, a truly accurate valuation requires a detailed analysis of your specific business. Factors such as your current and past financial performance, the sale prices of similar businesses, and the overall health of your industry can inform a valuation. However, it's crucial to remember that any valuation is ultimately just an estimate—the true value of your business is determined by what a buyer is willing to pay.

Receiving a high valuation can be flattering, but it’s important to set realistic expectations about what your business might achieve in the market. Listing your business at an inflated price could discourage potential buyers willing to pay a more reasonable amount and may lead to disappointment if you need to lower your asking price to close a deal.

How do I prepare my business for sale?

When selling any asset—whether it's a house, a car, or another personal possession—it's important to ensure it’s in the best possible condition to maximize your returns. Selling a business is no exception. While preparation may not necessarily increase the intrinsic value of your business, it can significantly enhance its appeal to potential buyers. Here are some steps to help you get your business ready for sale:

Organise Your Financial Records
Potential buyers will inevitably want to review your company’s financials to assess its viability as an investment. Preparing these documents in advance not only saves time but also demonstrates professionalism and transparency, which buyers will appreciate.
Enhance Curb Appeal
If your business operates from a physical location, ensure it looks inviting and well-maintained. Freshen up the premises with a coat of paint, repair or update any weathered signage, and consider modernizing outdated equipment. First impressions matter.
Obtain a Professional Valuation
Understanding the true value of your business and setting realistic expectations can help you target the right audience. A trustworthy valuation ensures you’re positioning your business appropriately for potential buyers.

How long will it take to sell my business?

The time required to complete the sale of a business can vary significantly and depends on numerous factors. These include the desirability of your business, the time it takes to find a suitable buyer, the speed of negotiating price and terms, and whether due diligence uncovers any issues. Generally, selling a business is a lengthy process, often taking six months or more. In many cases, it may take between six and twelve months to finalise the deal. Setting realistic expectations about the timeline can help minimize frustration and disappointment.

Although delays can occur for various reasons at any stage of the process, there are steps you can take to expedite the sale. Before listing your business, it’s essential to prepare key financial documents such as past accounts and cash flow statements. These will be critical during negotiations, so having them readily available can streamline the process.

One of the most time-consuming aspects of selling a business is finding a buyer who not only has an interest in purchasing but is also financially capable of doing so. Hiring an experienced adviser can significantly speed up this step. Advisers often maintain a database of potential buyers and can identify and contact those most likely to be interested in acquiring your type of business.

What are the tax implications of selling a business?

The sale of your business will naturally have a range of tax implications. If your business is a limited company, you will likely be subject to Corporation Tax on the profit generated from the sale. If you are a sole trader or operate as a business partnership, you will be liable for Capital Gains Tax (CGT) instead. Entrepreneurs’ Relief, if applicable, can help reduce the CGT rate you owe. Depending on your business structure, such as being a sole trader, the sale may also impact your personal income tax. If the business is sold as a going concern, you should not be required to pay VAT on the transaction. The exact effect on your tax situation will depend on factors like the sale amount, your eligibility for tax reliefs, and your business structure. Given the complexity of this area, it is crucial to seek professional advice regarding your tax position before proceeding with the sale. Proper planning may also significantly reduce your tax liability.