How long is the legal process?
The time frame of the legal process can vary depending on the nature of the business and whether there are any legal complications. However, from the signing of the heads of agreement until completion you should usually leave at least six weeks.
Can you sell a business that is losing money/how to sell a failing business?
There are a lot of reasons why a buyer may be interested in a failing business and this might be a good route for a business owner who has seen a downturn in their enterprise.
A buyer might be looking for an investment that will have a lower valuation that they can buy, inject capital or energy into and turn around to start making a profit.
Make sure that you have considered all outstanding legal issues and trying to clear as many outstanding debts as possible. Focus on your assets and market these to buyers such as your customer base or your supplier relationships.
You will also need to be honest with potential buyers about your flaws. These will be revealed during due diligence and it is better to be upfront about these from the beginning.
Do I need a lawyer to sell my business?
Due to the complicated nature of selling a business, it is wise to have a lawyer involved in the process. It is not a prerequisite, however, there are a lot of contracts that will need to be written up and worked out that will make it advisable to have a lawyer to help.
Some of the ways that a lawyer will help you are by making sure that all your contracts with customers, suppliers and employees are up to date. They will be able to write up a Non-Disclosure Agreement for the potential buyer to sign before the due diligence process and negotiate and draft the sales agreement.
Do I pay tax if I sell my business?
If you sell your business, you might have to pay Capital Gains tax. This is true for any business asset that you sell. You will pay capital gains tax if you are a sole trader or in a business partnership. Limited companies, however, pay Corporation Tax if they make any profit when they sell any asset, including the business.
There are cases in which you will qualify for tax relief. Make sure you are aware whether or not you qualify for this by thoroughly studying the Government website. In particular, consider how Entrepreneur's relief can help you to pay less than normal rates on Capital Gains Tax on the sale of your business.
Do you need a broker to sell a business?
The decision of whether or not to use a business broker can be a confusing one for those that are setting out to sell their business. The short answer is that you don’t have to have a broker to sell your business. The long answer is more complicated than that.
The sales process can require a lot of your time. If you are very involved with the day to day running of your business, getting a broker to assist with the sale can allow you to keep your focus on your business.
You will need to give the broker a commission of the sale. Most importantly, however, the exact broker you use can make a huge difference to the success of the relationship.
Read more in depth on the question here.
How can I sell my small business fast?
There are a few considerations that you can make if you want to sell your business as speedily as possible.
Make sure that you have priced your business correctly. If your business is overpriced, you will struggle to find a buyer. Make sure that you are prepared for the due diligence process. Have all your documents and financials in order and ready when requested.
Make your business listing as attractive as possible. Get some really good, high quality images of your business to go with the listing and give as much information as possible to any potential buyer.
You could also find a similar business to yours that might want to expand their customer base or offerings through purchasing your business. Usually, they will not want to buy the premises or the fittings or the equipment. They will, however, be looking for your contracts with suppliers and your intellectual property.
How do I market my business for sale?
In order to market your business, you should take advantage of the reach that putting online will have. You can also use a broker to help with this process and they should be able to take this action for you or assist you. They will also be able to advertise your business through their established networks.
No matter whether you advertise online or offline, you will need to get high resolution images that give a clear idea to the buyer of what your business looks like. You will also need to include as much information as possible in the advert. The more information you can include without giving away sensitive information, the better.
Luckily, BusinessesForSale.com can help you with this! Get hold of us if you want us to write your listing for you to make sure that it is written for SEO and to ensure you get noticed by buyers.
How do I sell my business privately?
If you want to sell your business privately, you can reach out to customers and people in your network to see if there is anyone that is interested. You can also find out if there is a competitor that could benefit from buying your business.
Be careful, however, not to share sensitive information without having an NDA in place!
Alternatively, you can list your business on an online marketplace. This will give thousands of potential buyers’ access to it and anyone searching for a business for sale online will, hopefully, come across your listing.
How do you evaluate a business for sale?
Luckily, we have put together a guide for anyone looking to buy a business. Read through it to find out what you need to know if you are a buyer that is looking for the right business to buy.
Most importantly, you will need to do your research and conduct a thorough due diligence before you sign on the dotted line!
If, however, you are looking to evaluate your own business before listing it for sale, use our valuation tool, ValueRight, to find out what it is worth. You could also ask a broker to help you with the valuation.
How do you value goodwill for a small business?
Goodwill makes up a significant portion of the value of a business but, due to its intangible nature, it can be difficult to assess its value.
The value of your goodwill be higher if you have a good standing in the community, you have solid relationships with your customers and suppliers, or you have protected intellectual property that gives you an advantage in the market.
There are several methods used to calculate goodwill, however, most importantly, the value will be what someone is willing to pay for your business. Find a professional to help with the valuation if you are unsure.
How long does a business take to sell?
This answer will obviously vary depending on the business and the sector that it is in. In general, however, it takes 6 to 9 months to sell a business. Some business owners find that it can take a lot longer if there is a downturn in the market. If it is priced correctly, it will sell quicker.
How to know when to sell your business
We have created a guide to help you through the process of selling a business. If you are struggling with the decision of when to sell, read the section on timing the sale of your business.
How to sell an existing business
Our guide to selling a business will take you through this process step by step. If you still have questions, you can employ the services of a broker to help you.
This guide will give you a good idea of what it is that you need to consider when it comes to selling your business. Go through it carefully to make sure you have not forgotten any of the important steps.
Alternatively, why not contact our customer services team to get some advice!
Should my accountant sell the business for me?
An accountant can play an important role in the sale of your business. If you are putting together a team to sell your business your accountant will be valuable in ascertaining the value of your business and they will be able to prepare for the due diligence. In particular, they can get your financials into better order so that you are more likely to attract a buyer. An accountant will also be able to work out the deal structure for you.
Unless your accountant has experience in selling business, though, you may need to find a broker or agent that can help you to find a buyer. Finding someone who is familiar with the valuation of businesses could also be necessary if you are to get the best results possible.
What happens to cash when selling a business?
The seller of the business will keep the cash on hand as well as the accounts receivable. The buyer takes control of other assets such as merchandise, equipment and the brand itself.
This is not, however, true for all businesses and can vary from one instance to another. Some buyers will take over the accounts receivable in a business so that they can immediately start dealing with customers and get cash flowing into the business.
What is a disclosure letter?
A disclosure letter is an important part of the sale of any business. It is a document where the seller will make any disclosures against any warranties that the buyer will need the seller to give.
This document will usually be prepared by the seller's legal team for the buyer. Usually, the seller will need to put as much detail and information into the letter as possible. The seller must make sure that the buyer is able to gain a full understanding of each of the matters disclosed.
If, as a seller, you are unsure as to whether something should be included or not, err on the side of caution and put it in.
What is an NDA?
A Non-Disclosure Agreement (NDA) is a document that will protect the seller during the due-diligence process. Any potential buyer will be accessing information about your business, its finances and other sensitive information. It is vital that you have an NDA in place in order to protect your business.
Ask for professional advice when drafting an NDA to make sure that you have included everything in it. This can include employee information, details of your products, your technology or innovation, financial information and databases.
How to sell your small business without a broker
Listing your business online can be a good way of reaching potential buyers without using a broker. This will mean that you will have an active role in the sale. If you have experience in selling a business, this would be the perfect option for you.
This option would also allow you to avoid paying the broker commission. You will still most likely need to consult a lawyer or an accountant during the sale in order to get the accounts and documents in order.
How to sell your small business with a broker
When you are looking to sell your business, you will need to keep your foot on the pedal right up until you hand over the keys. This may mean that you don't have the time to sell your business yourself. You might also be unfamiliar with the process and so need the help of a professional.
A broker will be able to handle much of the sale for you including drafting the terms of service and the negotiations. Make sure that you find the right broker for you and one that you can trust with a good track record.
How do I choose a business broker to sell my business?
When choosing the right broker, you need to carefully consider your needs. Find a broker that has experience with businesses in your sector and of a similar size. If you can, speak to previous clients and find out about their experience with that broker.
Most importantly, you need to get on with the broker. You will need to be able to trust that the broker has your best interests at heart.