If you are considering selling your business, you will want to maximise the amount you receive. By attending to certain issues before you put your enterprise on the market, you stand a good chance of being able to obtain a better price.
Not only this, but you may find it easier to sell and with a faster transaction time than might otherwise be the case.
1. Settle internal disagreements
If there is an internal dispute, this could escalate under the pressure of a sale and it will make your enterprise far less attractive to buyers.
For example, if shareholders are in disagreement with the directors, this is likely to come up at the time of any sale and you may be asked to address this. By dealing with it before you put your business on the market, you can be sure that this won’t be a cause of delay.
Speak to those involved and look for a way forward. If the dispute has been ongoing for some time and positions are entrenched, mediation may help.
2. Legal issues
As well as internal disputes, you may be involved in legal disputes with external parties. This has the potential to be really off-putting to buyers and they will want you to give indemnities in respect of any legal action.
The best option is to try and settle the matter before you sell. Try and formulate a plan for solving the dispute and remember to look at the bigger picture. You may have to compromise, but if the result is putting a difficult disagreement behind you, it is worth at least considering.
Professional guidance will help you decide how you want to proceed and what concessions it might be reasonable to make.
3. Review your documentation
As well as examining your financial records, your buyer will want to see all of the legal documentation that your business is a party to, including the following:
- Supplier contracts
- Employment contracts
- Shareholder or partnership agreements
- Commercial leases
- Title to real estate
- Title to intellectual property
If you have a suspicion that some of it might not be quite as robust as it should, take the time to have it redrafted. An expert commercial advocate will be able to help you look at any documents that need updating or creating to safeguard your business’s interests. Getting this done before your buyer makes enquiries will not only prevent delays while amendments are made or discussed, but will also give a better impression of your enterprise as efficient and well run with good attention to detail.
Protect your intellectual property
Intellectual property (IP) may be created in the course of running a business and it is easy to overlook protection for this asset. Take an inventory of your IP before you sell and where necessary apply to register trademarks, such as your logo or any product name that your business relies on, and any registered designs.
Collect in debts
Make a concerted effort to collect in as much debt as possible. A large number of unpaid invoices does not send a positive image to potential buyers. They may expect a nominal amount to be outstanding, but if you are owed a substantial sum you should attempt to deal with this.
For information, see our recent article, How to get the best price for your business.
At Quinn Legal we have extensive company and commercial knowledge. If you are considering selling your business and you need advice on preparation to put your enterprise in the strongest possible position, we can help you address any issues.