As the old saying goes, there are only two ways you're going to leave your business: you're going to walk out, or you're going to be carried out.
Let's err on the side of optimism and assume that you walk out: but even then it doesn't automatically follow that everything has gone to plan - that you have sold your business for the price you wanted at the time you wanted and that the package you have received is exactly what you aimed for.
Selling your business is hard work - and is potentially very stressful. You have got to negotiate the sale at the same time as giving as much attention to running your business as you have always given. Far too many people end up wasting a lot of the hard work they have put into building their businesses by failing to plan their exit strategy properly.
So on the assumption that you have decided the time is right to sell, what are the steps you should take to make sure that you achieve exactly the result you want? However you sell your business - whether it's family succession, a trade sale, a management buy-out or a stock market flotation - it needs planning and planning carefully.
Here are some simple steps that you need to take to make sure you achieve the very best price for your business - and that the sale process is as painless as it can be.
Give yourself time. If you are planning to sell your business and retire at 60, starting to think about it when you are 59 isn't the answer. You need time to plan properly and - if you are going to get the very best price for your business - you may also need to wait for general economic conditions to be right.
Be realistic. Unless you are the latest hi-tech start-up that everyone wants to buy into you are not going to get an astronomic price for your business if you haven't made any profits. If you can, look at what businesses similar to yours are selling for and the way in which the sales are being structured - whether it is an outright cash purchase or whether the money is being paid over a number of years. Having unrealistic expectations of what your business is worth and how you are going to get paid will ultimately lead to frustration and disappointment.
Keep your profits increasing. It may well be tempting to depress your profits to save on corporation tax, but what someone buying your business wants to see is clear evidence of steadily increasing profits. You can't say to a potential buyer, "Well this is what the books say but the real position is…" Why on earth should they believe you?
Make sure your accounts are in order. Hand in hand with increasing profits is making sure that your accounts are in order and that your commitments to the taxman have been met. It's all part of presenting a clear picture of your business to a potential buyer: they will almost certainly carry out 'due diligence' checks before they hand over the money and any problems will come to light at that point.
Keep your customer records up to date. One of the key assets of your business may be your customer/client bank. It's crucial that your records are kept up to date: whoever buys your business will want to be in touch with the clients as quickly as possible and they won't be impressed if you don't have accurate records which, these days, will need to include e-mail addresses.
Long term contracts. If possible, tie your key customers or clients in to long term contracts. This guaranteed cash flow will give confidence to your potential purchasers - which will translate into an easier sale and a higher sale price.
Intellectual property. Increasingly, the key asset of many businesses is knowledge. Make sure that your intellectual property is secure and make sure that your key people are going to remain with the business after the sale. If the sum you are receiving for the business is tied to the profits the business makes in the future this is absolutely crucial.
Comply with the legislation. Finally, make sure your business complies with all the current legislation. Yes, we know that doing this is time consuming and non-profitable, but any potential buyer of the business will want to know that your business meets all the current health and safety laws, employment law and any other legislation that's relevant to your business.
Exit strategies in business can be complex - for example, we haven't even touched on the tax implications in this article - but a little planning and forethought goes a long way. Work you do in advance can make the whole process a lot easier - and a lot more profitable.
We're always happy to talk about your exit from the business, whether you decided the time is finally right to sell-up or whether you are thinking ten years ahead.