We’ve spoken before about how to get your business in good shape to ensure your protect its value and potentially prepare for a sale.
There are a number of areas that you should consider reviewing, to ensure you have ticked all the boxes that a buyer would investigate as part of its due diligence. We have listed some of these areas below:-
Customers
Do you have robust paperwork that creates strong relationships with your clients, gives appropriate warranties and protects you from customer claims or complaints?
Are your payment terms realistic and sufficient to ensure good cashflow in your business?
Do you have a process for enforcing them?
Suppliers
Again, have you ensured you have strong ties with the people you depend on? Do you do business on your terms or theirs? If so, do you have copies of their terms and conditions? What termination provisions are there? What would happen if they weren’t around anymore? Do you have a plan B?
Not being able to demonstrate strong arrangements for both these groups of people, could put a buyer off your business.
Property and assets
Do you have a physical premises? Under what legal arrangement are you occupying your premises? Is it short or long lease? Are you coming to the end of the term? If so, can you be sure that your landlord will renew your arrangements?
What about the other tangible assets in your business – equipment? Stock? Do you have a good inventory? Are any assets on HP? How long have they go to go and how much debt is there?
What about your intangible assets? Goodwill? Have you registered your trademarks? Bought all necessary domains etc.
Policies and procedures
Have you got an operating manual that sets out how your business is run? Document your processes, so that someone could pick up the manual and have at least some idea of how to operate your business. As a business owner, its had to give up control sometimes but if all the information is in your head, that could prove disastrous. What happens if you get sick or worse still, die suddenly?
Do you have all the necessary compliance documentation – Data Protecction, Bribery and Corruption, Health & Safety. Anything that you need that is specific to your business?
We would go so far as saying ALL BUSINESSES and BUSINESS OWNERS should conduct an audit to check their affairs are in order, whether or not they are thinking of selling.
At Aly Young Law, we are experts in helping businesses through the sale process. As part of this, we can help a business that is preparing for sale, make sure that they have done all they can to put their business in good shape. This will ensure you will get the best price for your business and make the sale go through as quickly and easily as possible.
Even if you aren’t thinking of selling your business, we can help you work on your business to get the right paperwork in place to create a robust and stable working environment, which gives you peace of mind.
Next year we are going to run seminars for business owners who want to put their house in order. Please do get in touch if you would be interested in attending one of these.
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