Selling your business is one of the most significant financial decisions you’ll make, and proper preparation is essential to achieving the best outcome. At Infinity Buying Group, we understand how overwhelming this process can feel, which is why we’re here to guide you every step of the way as we work together to achieve the best outcomes for both the seller and the buyer.
Whether you’ve been considering selling for some time or circumstances have recently prompted the decision, following these steps will help you maximise value and ensure a smooth transition.
1. Understand Your Business’s Value
The first step is gaining a clear understanding of what your business is worth. A comprehensive valuation will assess your company’s financial health, assets, market position, and growth potential. This isn’t just about reviewing revenue; it’s about understanding the deeper value your business brings to the market.
Infinity Buying Group want to ensure that business valuation are realistic and expectations are achievable in line with market conditions. Inflating numbers or driving a hard bargain to get the lowest possible price does not work for either party. It is important to fostering long-term, trust-based relationships as both buyers and sellers will need to work together for several months, even years to ensure the legacy of the company is maintained. If either party feels ‘duped’ this does not lead to cordial and committed relationships.
2. Get Your Financials in Order
Potential buyers want to see clean, well-maintained financial records that paint a clear picture of your company’s profitability. Before you begin the sales process, take time to review and organise your financial statements, including profit and loss accounts, balance sheets, asset registers and tax filings for the last three to five years.
Investing in professional help, like engaging an accountant, can streamline this process. Transparency is key, and being upfront about any financial challenges will build credibility and reduce issues during due diligence. Past financial issues may not be a problem with the sale going through if the risks can be mitigated, at completion, the buyer not knowing about them can cause significant issues.
3. Strengthen Your Business’s Operations
Buyers are attracted to businesses that can operate independently of the owner. If you’re involved in the day-to-day operations, now is the time to delegate responsibilities to a strong management team. Streamline processes, automate where possible, and ensure operational efficiencies are in place to make your business more attractive. If your team is understaffed or investment in people has not been made, this will impact the purchase price. Any form of investment to get the business up to scratch will be taken into consideration by the buyer. Using property as an example, a property that is tired and in need of renovation will fetch a lower price than one that has been well-maintained and in good condition.
By positioning your company as a self-sustaining entity, you increase its appeal to prospective buyers who are looking for a smooth transition with minimal disruption.
4. Resolve Any Outstanding Legal Issues
Any legal or regulatory issues can be a red flag for potential buyers, so it’s important to resolve these before listing your business for sale. This includes reviewing any ongoing contracts, intellectual property concerns, or employee agreements. At Infinity Buying Group, we encourage sellers to be transparent about any legal challenges and work with us to find solutions before presenting the business to buyers.
5. A Business is Only as Strong as the People Who Work in it!
Whilst you may not want to inform your team that you are planning to sell the business for fear they may leave due to the uncertainty of new owners. It is important to ensure the culture of your business is strong. Staff who are overworked, underpaid or disgruntled can put the whole sale at risk. No buyer wants to acquire a new business where there are staffing issues and the threat of walkouts.
6. Prepare for Due Diligence
Due diligence is a thorough examination that potential buyers will conduct before finalising any transaction. It’s essential to be organised and ready for this process. Buyers will review your financial health, operations, customer contracts, supplier relationships, and employee agreements. Being proactive and prepared can save time and ensure the process moves smoothly.
By preparing your business for sale with the steps outlined above, you will be in a stronger position to secure the best possible outcome. At Infinity Buying Group, we value honesty and integrity, and we’re committed to guiding you through every stage of the sales process. Let us help you take the next step toward your future.
You can download a sample list of Due Diligence questions HERE.
