Professional Services for Sellers
When you are selling or planning to sell a business, getting the right advice and service is crucial. It cannot be stressed enough how important it is to choose your advisors carefully. It could make a massive difference to the costs and your experience of the sale.
If you are planning to sell your business you will need to consult some or all of the following depending on your circumstances: -
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An accountant - required to provide the latest accounts and (if suitably qualified) to advise you on the tax implications of the disposal of your business. You may also need your accountant to assist you in answering questions on the accounts as part of the purchasers due diligence process.
On completion of a sale you will also need an accountant to produce final (completion) accounts and (if appropriate) complete the necessary paperwork to wind up your company and complete your tax return to allow you to settle any tax liability.
The chances are that you already have a good relationship with your existing accountant or book keeper and that they are best qualified to answer questions from purchasers on the accounts that they have produced for you. However it is advised that you speak to them specifically about what experience they have of planning a tax efficient sale. If this is not something they can offer you may wish to consult a specialist sales agent or accountant to assist you in this area.
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A solicitor - to carry out the legal transfer of the business from you to the purchaser. On leasehold properties we would also recommend that you ask them to review your lease in advance of the sale to advise on any issues or liabilities or to transfer the freehold element of your business in an asset sale.
Many buyers and sellers automatically engage the firm who previously carried out the conveyance on their last house purchase; others shop around for the cheapest quote. Selling a business is a very different field from selling a house and opting for the cheapest quote may prove to be a false economy; solicitors generally work on a chargeable time basis and in business their quote is simply an indication of costs and very few will commit to a fixed fee. Perversely, this can mean that an inefficient solicitor may cost you more! In extreme cases a poor lawyer may cause the deal to fall through.
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An independent valuation company (optional) - useful to provide an honest, independent and objective valuation report for your business. Independent valuations are used by partners looking to agree a fair price to buy another partner out. They are also frequently used by banks considering funding for prospective purchasers [although many banks will only recognise valuations from specific companies, so choose your valuer carefully].
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Business broker / Business transfer agent (optional) - the sale or purchase of a business can be conducted with or without an agent. A professional business transfer agent will not just match the seller and buyer and negotiate the full commercial terms of the deal; they will also be heavily involved in facilitating the actual legal transaction.
A good, knowledgeable, proactive business transfer agent can be an invaluable asset, helping to maintain confidentiality, avoid timewasters, secure the best deal for the vendor and push the landlords, solicitors and other professional advisors to ensure that the sale completes as quickly as possible.
A poor business transfer agent can add an unnecessary level of complexity and will add little value. Your choice of agent is therefore extremely important. We would recommend selecting an agent or broker with accreditation to the Institute of Commercial Agents (ICBA) which means that they must operate within a rigorous 'best practice' framework and must pass a series of examinations to prove technical understanding of the subject.
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Financial Advisors (optional) - it may be worth consulting a financial advisor at an early stage to look at your overall net worth, with a view to how best to reinvest the sale proceeds to optimize how your money is utilised and to help you carry out your future plans and objectives. For owners who will be retiring or semi-retiring after the sale, it is wise to start to think about inheritance planning.
Clearly it is not essential for a financial advisor to have worked specifically in your sector before. However, it is still relevant to ask what kind of people they work with most often? Ask the advisor to describe their typical client in terms of age, outlook and level of assets. If they describe you, it is more likely to be a good match.