If you’re considering selling your business, adequately preparing for the sale is crucial to ensure a smooth transition to the new owners.
As the old adage goes, fail to prepare, and you prepare to fail! So, without further ado, here’s what you need to know about preparing your business for a sale.
Selling your business obviously impacts your employees, so proactively managing communications and transitions is essential.
Depending on the nature of the sale, not all employees will wish to stay on, but the acquirer will likely express interest in keeping as many processes uninterrupted as possible.
In most cases, contracts are usually transferred to the new owner under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). These regulations protect employees’ rights in the event of a business transfer.
Develop a communications plan to give notice about the sale, address concerns transparently, and cover how transfers will work. This maintains morale and productivity during the transition.
Providing fair severance where needed also manages goodwill and helping employees navigate the changes smoothly ensures business continuity that buyers value.
Reputable financial advisors can offer HR guidance on employee rights, transfers of contracts, pension arrangements, and related obligations – don’t overlook this.
Undertake a detailed assessment of your company’s finances, including accounts, tax records, debts, assets, insurance policies, and agreements.
Make sure documentation is comprehensive, accurate and organised. Consider having financial statements audited if not already – verified figures give buyers confidence.
Tackle any existing business problems, from operational inefficiencies to supplier disputes.
This shows buyers that issues are identified and resolvable, reducing the perceived risk that could otherwise negatively impact valuations during sale negotiations.
Here’s more information on what happens to your contracts in a business sale:
Assemble and train a management team to oversee daily business operations during and after the sale.
Buyers want assurance that a skilled leadership pipeline exists beyond just the owner-operator. A reliable management framework ensures consistency through ownership changes.
Engage financial, legal and tax advisors early when preparing to sell. They can guide you through due diligence, contract negotiations and employee transfers.
Their expertise protects your interests and often results in higher sale prices. Adequately preparing for your small business sale requires effort but pays off for both buyer and seller.
If you need help selling your business, contact Batt Broadbent. We can help you negotiate legal processes and obtain a smooth, favourable transition.