Top Tips on Buying or selling a business?

You have worked all your life and now finally you feel it’s time to cash in, tidy the garage up and go on that cruise,  talk about pension accruals or foreign policy and other such trivia that nobody really has the time to study when spinning around in ever decreasing circles in the rat race. But one thing is in the way of that well deserved retirement – selling your life’s work! Here are a few tips on what you should be looking at –

Get professional advice early on

Seeking professional advice early on is crucial. Don’t be fooled by the so called business experts as the market is crammed with lots of experts seeking to impart their wisdom … exchange for your cash. Go to a decent accountant who knows your books, and a solicitor who can sort the legals. Don’t simply do it on price – as paying peanuts does get monkeys. Get the right people who can work as a team, and who will get the job done. Do you want the fees payable on success i.e. contingent, or as a fixed fee (upfront or staged)?  Your accountant will be able to advise on the most tax efficient way of selling and receiving the money – hopefully.


It isn’t going to happen overnight and all those loose management ends could really do to be tied up. Get the books sorted, get the contracts signed – do your own pre due diligence in other words. Make sure that you are complying to the regulations, that any disputes are settled, that the I’s are dotted and the t’s crossed. If you are going to have a great year – selling once those figures have been done maybe ideal since historic accounts are fine – but they are historic and the figures may well lose their significance. You can save so much time and associated expense if you predict what your buyer will want to see – and make sure it’s all in order. You may well plan the sale for over a year or more – it’s called your exit strategy.

What do you want?

Do you want to leave fully and sail off into the metaphorical sea? If you are leaving the industry for good – it may be worth something to the buyer knowing that you aren’t going to compete. Or maybe stay on as a consultant and hand over the business over a period. Do you want to become less involved but still retain some ownership? What indemnities are you prepared to give to those buying? Are you going to sell the business but retain the property and rent it to the new business owners as part of the deal?   All of the above is actually fairly simple once you have decided what’s right for you. The trick is to keep things simple and be transparent.

What’s it worth?

What do you think it’s worth and is that in line with the market? Are you expectations realistic? Often doing a bit of research is quite interesting. Why not look at similar deals over the last 12 months and see what they went for. If there wasn’t any then perhaps it’s not a great time to sell or conversely – it just maybe. And when should you get paid – upfront, staged or by way of earn out?

Who is going to buy?

If you have been planning your exit, you maybe be able to seize that opportunity all the better. Who do you know in the market that maybe on the acquisition trail?  Would your competitors be interested? Or would your management team be willing to step up to the mark?


Is it a share or asset sale? A management buyout or in? Also – it sounds silly but question whether the buyer has good security, particularly if payment under the transaction is completed in stages following completion. You don’t want to sell your dream ticket only to find out that its gone sour when the buyer ruins things and can’t pay you. It does happen more than you would think.

As always if you have any queries, concerning the above or any other legal issues, please do not hesitate to contact Giles Ward at Milners Solicitors –  – 0113 3801 850/07789 401411.

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