Checklist for preparing your business for sale

Some business owners have an eye on “exit” at the start of a venture. They have a business plan that includes an understanding of where they wish to be in, for example, 3 to 5 years’ time. They may even have identified potential future acquirers, once they have taken the business as far as they can.

But most don’t think this way. Typically, the owner of a family run business is usually thinking more in terms of “handing the business over” to their offspring when they are ready to retire. But what if they’re not interested in taking on the business?  Whilst it might seem counter-productive to be thinking of the “end” at the start of a venture, this can prove to be a great tool in ensuring the business is driven in the right direction.

There are many examples where a business, well-prepared for exit, achieves better results: a smoother process; a greater return; less chance of any nasty surprises, and, an altogether happier group of shareholders.

Having worked with many SME growth companies, I have found the following checklists to be helpful when considering an exit strategy.

  • Authority: Are all shareholders in agreement with the strategy? Are the Board authorised to sell? Are there any shareholder or bank consents required?

  • Corporate Governance: Are the company books, filings, tax returns up to date? Does the Company have a good governance structure?

  • Confidentiality: ensure that only those that need to know, know. Use confidentiality agreements where required.

  • Finance: are the accounts in order. If the company has external finance arrangements, check what consents would be required to sell.

  • Assets: Does the company own all its assets that are needed for the business or does it hold correct and valid licences to use such assets?

  • Contracts: Will the current client contracts survive a sale (i.e. if a share sale is anticipated, is there a change of control clause in the contract; if an asset sale, are you able to assign without consent)

  • IP Protection: Does the Company own all its intellectual property? Have all IP rights been registered? Do employment contracts contain IP clauses?
  • Employees: are the employees that are integral to the business. Do they need to be tied in with retention bonuses? Are the employees aware of the potential sale? Depending upon the format of the sale employees may need to be informed and consulted.

  • Property: are there any onerous property arrangements that would be unattractive to a buyer?

  • Pension: are there any deficits in the pension scheme that would be unattractive to a buyer?

  • Sale Documents: do you want to run the sale process? Perhaps via an auction where the seller drafts the sale documents; or through a conventional route with the buyer drafting the sale documents.

  • Buyers: are you able to identify potential buyers: are you looking for a sale to a business undertaking the same trade? or looking to sell to current shareholders, employees or management (who may need private finance?); perhaps a sale to private equity? Or, even an exit via an initial public offering/listing?

  • Timing: is your business seasonal? Is there a better time of year to be looking for a buyer?

  • Tax and structuring: will this be a share sale or an asset sale? Have the owners taken tax advice?

Before you even start the process, it is important to sit down with your legal advisors and all parties concerned to establish that everyone is in agreement. It can be surprising how often, especially in family run concerns, some partners had not realised that selling the business was even under consideration.

When people start a business venture, selling it is often the last thing on their mind.  However, the sale of your business ideally needs to be part of your overall strategy, the one that you develop sooner rather than later. When you decide to work towards exiting you need to make sure the business can work without you. Installing management structures, systems and processes is essential.

In my next blog, I’ll provide some key points for established businesses looking to acquire but in the meantime, my team and I will be happy to provide help and advice on all matters relating to buying or selling a business.


Victoria McMeel
Posts: 3
Stars: 0
Date: 19/06/18
Daniel Murray
Posts: 1
Stars: 0
Date: 12/06/18
Adam Wadsley
Posts: 1
Stars: 0
Date: 05/06/18
Deborah Sutton
Posts: 1
Stars: 0
Date: 27/04/18
Guest Blogger
Posts: 14
Stars: 0
Date: 11/04/18
Dana Ewans
Posts: 24
Stars: 0
Date: 05/04/18
Carmen Stevens
Posts: 2
Stars: 0
Date: 28/03/18

Events & seminars

Browse our programme of training, seminars and special events.

Find out more

"Having the opportunity to tap into Jordans compliance and legal services when required is an added benefit to us and our clients"

Nimesh Pau, R Pau and Co


Keep informed with our free online newsletters and email updates.

Find out more