Selling a business or company can be an extremely rewarding process for business owners. Not only is there the obvious financial reward, there is usually also a real sense of personal achievement.

However, for those who haven’t sold a business before (which is the majority of sellers) it can often feel quite a strange and daunting process.

A buyer will, understandably, want to find out as much about the seller’s business as possible before they part with any cash. Accordingly, they and their advisors will undertake a detailed pre-contract investigation process known as “due diligence”. In practice, this will involve various searches and enquiries and a seemingly never-ending series of questions into every aspect of the seller’s business (eg assets and property, contracts, employees, disputes, accounts, tax etc).

Due diligence is, by its very nature, an invasive process. Moreover, because it is designed to identify any potential “problem issues” that may cause the buyer to reduce the price or (in extreme cases) abort the deal entirely, it is often a very frustrating and stressful process for a seller.

However, by careful planning and working with their lawyers and other advisers from an early stage many potential problems faced by a seller can be addressed upfront. By taking this approach a seller can substantially reduce the amount of time, cost and stress involved and significantly increase the chances of a successful sale without any price reduction.

Set out below are our top tips for anyone considering selling.

• It is never too early to start planning. The earlier you start to plan your exit, the more options will be available to you. For example, pre-sale restructuring and tax planning may need to be undertaken years in advance to be fully effective.

• Do speak to your lawyers and accountants at the outset. They can add real value and help maximise the amount you receive on a sale.

• Think about the issues that are likely to be of concern for a potential buyer. These might include:

o Ownership of shares and assets (including intellectual property)

o Up to date written contracts with key customers and suppliers

o Properly documented employment contracts and policies (particularly with key employees)

• Accept that a buyer “will find out”. Don’t ignore or try to “bury” potential problem issues. Address them early – preferably well before a buyer is even on the scene.

• Ensure any minority shareholder will sell on the same terms as you (or consider buying them out now)

Our Corporate team is extremely experienced in advising sellers and buyers of businesses and companies and regularly work with sellers to help prepare them for sale.

As with so many things in life, the secret to a successful sale can be summarised in the immortal words of Robert Baden-Powell: “Be prepared!”