Last month we took an in-depth look at finding the right successor when the time comes to retire from your own business. That is not your only option though, and we are keeping our promise of taking a look at your alternative options: selling or merging with another company. Let’s see how to go about this and what you need to keep in mind.
Start planning early
As with most big decisions in life, it pays off to plan early. The sooner you start considering and identifying your options, the better. You don’t want to miss great opportunities just because they may need to happen a few months sooner than you may have had in mind.
Get a valuation
In fact, get one and then get a second opinion. Getting your business valued is the first step in selling or merging; you need to know what it is worth before you can approach buyers. It is not unusual to overestimate what your business is worth – after all, you have put years of toil and effort into it so it will be invaluable to you. This is why getting a second opinion is a good idea. Not only does is help narrow down the value, it will also give you a clear idea of the market worth of your business. There will be a lot of variables to consider: fixed assets, order pipeline, and intellectual property, to name just a few.
Create a vision for the future
Selling a business becomes much easier when you can demonstrate that there is a future for it. That means being able to show prospective buyers that it will run just as well without you at the helm, or that clients will not find alternatives once you have retired. Consider putting a manager in charge of day-to-day operations who can continue on once you are no longer part of the business.
Find an intermediary
Get an intermediary to manage the process of finding a suitable buyer. They will have a more objective view of the marketplace and of prospective buyers and can be more sanguine about pricing and succession planning. It is inevitable that with all you have invested in the business you will have a more subjective view of things. Do your due diligence on the process and on your chosen intermediary so that you can rest assured they will get the best deal for you and that all legal aspects will be dealt with appropriately.
Set a deadline
One that you must stick to and make sure all other parties do as well. Once you have identified a prospective buyer and the process gets going you need to agree on a timetable for completion, much as you would if you were selling your home. Just as you want to get the process over and be able to retire, so a buyer wants to know that they are investing in a company that means business.
For more advice or assistance on retirement planning and the options available to you, talk to us at Hammonds Accountants. Email us at or give us a call on 020 8249 6328 and we can get down to business.