The most common question asked of any business broker looks simple – “How do I go about selling my company?” Unfortunately the answer very rarely satisfies because it really depends on what kind of business it is.
We’ve put together a whole set of documents that explain it, starting here: https://www.venturabusinessbrokers.co.uk/selling/initial-considerations/ but I’m sure some people when asking are really not that interested in the process, they’re more concerned with working out the initial steps, I mean, it’s not like you can pop your company on eBay, is it?
Well actually, yes, it can be. I’ve seen adverts in local post offices where people are trying to sell their still-running, on-going business and that’s absolutely fine. You’ll obviously have to deal with Companies House and HMRC to make sure all the technicalities are worked out, but if you’re willing to take the risk, you’re quite at liberty to sell your business to whoever you want for whatever you can get for it.
But is it safe?
I suppose the issue comes down to experience and knowledge. Any potential buyer (well, one that’s doing due diligence) is going to want to go over your accounts in fine detail. They’ll want to see your balance sheet, profit and loss, all you records of sales and orders and probably more information than you normally have just lying around the office. This person is about to make a huge investment and so wants to make sure their hard earned cash isn’t going to be wasted.
Again, most of this depends on the business you’re in. If you have a lot of recurring custom then the purchaser is going to want to know why. Do people come back time after time because of the prices are good? Is it a personal issue such as they like dealing with the owner personally? Are there any reasons that depend on the current owner? If the owner then goes, will those sales go, too?
As a seller you need to be ready for these types of questions and you have to have good answers. It may, at the end of the day, prove to be far more economical to engage with a business broker from the start and have confidence that all this can be taken care of by people who know what they’re doing and have a lot of experience in exactly this area.