77. Seven Nuggets you should be thinking about now if you have even the merest inkling of selling your business

There are 7 key considerations when getting ready for sale:

1. Planning

Planning an exit strategy is absolutely key for any business owner looking to maximise value from all the hard work you have invested in setting up and growing your business. The old adage “failing to plan is planning to fail” is hugely relevant here.

2. Get the right advisers on the team

You need people with specialist knowledge of selling businesses

3. Identify a buyer

You can undertake initial research yourself; and a good place to start is businesses in your industry – think customers, think competitors. Why might they want to buy your business? Make sure you get things looking right. Might some/all of the existing management team want to buy you out – an MBO (called a Management Buy Out)?

4. Nailing the governance

There are basic things that frequently get missed. Mull on these questions:

  • Do you have a shareholders agreement in place, properly approved such that it will facilitate and not block a sale?
  • Are all contracts of employment current and in writing?
  • Do all directors have written and signed service contracts?
  • Are notice periods appropriate?

5. Key staff

Are key members of staff incentivised to carry the business through a sale or will they desert leaving you without a business?

6. Key contracts/ Customer base/Supplier base

Do you have a healthy spread of customers – not all eggs in one basket?

Do you have formal contracts with your main customers and suppliers?

7. Tax planning

Get a top notch accountant on side early in the process. This is a complex area and you could significantly reduce your take away money, if you get it wrong.

For example, if you have cash in the business don’t be tempted to take it out prior to a sale without taking advice; it is probably better to leave it in the business and if you are eligible for Entrepreneur’s Relief you will be taxed at only 10% on the gain (as opposed to your marginal rate of tax – which will be a lot higher).


Tectona Partnership is a team of 15 commercially savvy Finance Directors and who have real hands-on experience of both the preparation for, and the actual mechanics of, a sale.

Contact Tectona now if an exit of some description is even a blip on the extremity of your radar.

Posted in Tectona Ten - Planning for Exit/Aquisition/Divestment.

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