How To Sell Your Business In The UK

Wondering how to sell your business in the UK? Look no further than this guide for all theinformation you need to successfully navigate the process.

It's every business owner's dream: build a high-value business that they can sell for a big profit- freeing them up to pursue new ventures, fund their retirement, or simply cash out after years of hard work. However, selling a business is often easier said than done.

From determining an accurate valuation to finding the right buyers and structuring a deal, many potential pitfalls can derail a sale or cause you to leave money on the table. Studies show that a staggering 75% of businesses listed for sale never end up getting acquired.

Selling your life's work is one of the biggest financial decisions you'll ever make as an
entrepreneur. Getting it right can mean the difference between an early, lucrative exit and a sale that falls short of your goals. Let’s look at some steps to take to ensure a successful sale of your business in the UK - and how a business coach can make all the difference.

Why Sell Your Business?

Before we look at how to sell your UK business, let's first explore why you may want to consider selling that company you’ve spent so long building.

Entrepreneurship can be an incredibly rewarding journey, but it also comes with its fair share of challenges and sacrifices. Owning and operating a business requires a significant investment of time, energy, and resources. It’s natural for entrepreneurs to reach a point where they may want to move on to new endeavors or simply take a break from the demands of running a company.

Selling your business can provide you with the opportunity to reap the rewards of your hard
work and dedication. When you find a buyer who is willing to pay a fair price for your company, you can often walk away with a substantial sum that sets you up for your next step – be it retirement, a new venture, or a totally different lifestyle.

But the process of selling a business is not always smooth sailing. It requires careful planning, preparation, and execution to ensure that you get the best possible deal for your company. This can include things such as conducting a valuation of your business, identifying potential buyers, and negotiating terms that work for both parties.

Step 1: Know Your Value

So, you’ve been approached by a potential buyer or have decided to start actively seeking one out. Hold on – before you give in to your excitement and start discussing terms, take a step back and evaluate the true value of your business.

A business’s value may not always be as straightforward as its financials. Factors such as market trends, brand recognition, and potential for growth can all impact the value of a company. The last thing you want to do is sell your business right before a boom in your
industry, or undervalue it because you didn’t take into account its potential growth.

To accurately determine the value of your business, consider seeking professional help from a business coach. A coach with experience in business development and sales can help you identify all the factors that contribute to your company's value and guide you through valuing and selling it.

Step 2: Assess Your Finances

While the value of a business is not solely based on its financials, they are still an important aspect to consider. Take a look at your revenue, expenses, and any outstanding debts or liabilities. This will give you a better understanding of your company’s financial health and can help you determine a fair asking price for potential buyers.

Before putting your business on the market, you’ll want to have all of your financial records
organized and up-to-date. This will show potential buyers that you have a well-managed and profitable company. You might just find that addressing any financial issues before selling can increase the overall value of your company.

Step 3: Evaluate Your Assets

In addition to your finances, it’s also important to assess the physical and intangible assets of your company. This includes things like equipment, inventory, intellectual property, and even loyal customers or strong relationships with suppliers. These assets can add significant value to your business and should be considered when determining its worth.

Your assets can include:
● Equipment - this encompasses any machinery, vehicles, or tools that are essential to your business operations.
● Inventory - this includes all the products or materials you have in stock that are ready for sale.
● Intellectual Property - this refers to any patents, trademarks, copyrights, or other
intangible assets that give your company a competitive advantage.
● Customers/Clients - loyal customers who consistently purchase from your business
can contribute to its value as they provide a stable source of revenue.
● Relationships with Suppliers - having strong relationships with trusted suppliers can be an attractive asset to potential buyers as it ensures a reliable supply chain.

You may be surprised to see that your asset value is not solely based on tangible items like
machinery or inventory. Intangible assets can make up a significant portion of your company's worth. Many UK businesses miss this fact and end up undervaluing their company when it comes time to sell.

Step 4: Find The Ideal Buyer

You may have a buyer lined up, but it's essential to make sure they are the right fit for your business. Or what if you don’t have a buyer – but are looking to get out of your business? If that's the case, it's important to research potential buyers and find one who aligns with your company's values and goals.

Don’t forget: consider any potential cultural or operational differences between your business
and the buyer. Will they be able to effectively manage and run your company? Do their goals align with yours? These are important questions to ask when determining if a buyer is the right fit for your business.

Step 5: Set Up A Deal Structure

Once you have found a potential buyer and determined they are a good fit, it’s time to set up the deal structure. This involves deciding on the terms of the sale, such as the purchase price, payment method (e.g. cash, stock, or a combination), and any contingencies or conditions that must be met before finalising the sale.

Again, a skilled business coach can help at this juncture by providing guidance and advice on
what is standard in your industry. They can also assist with negotiating and drafting a
thorough purchase agreement that protects your interests as the seller.

Step 6: Sell!

After all the necessary preparations have been made, it’s time to sell your business! This is
often the most exciting and nerve-wracking step for any business owner.

It’s important to be organised and prepared to ensure a smooth and successful sale. Make sure all financial records are up-to-date and accurate, as buyers will want to see concrete evidence of your business’s profitability and potential for growth.

During this process, communication with the buyer is key. Keep them informed about any updates or changes in the deal structure, and be open to negotiations if necessary. A good relationship with the buyer can lead to a smoother transition after the sale is finalised.

Sell Your UK Business Successfully with a Business Coach

Are you ready to start looking at selling your UK business? Whether you’re a first-time seller or have gone through the process before, a partner at each step of the process can be extremely valuable.

At ActionCOACH, our team of seasoned business coaches has helped thousands of
entrepreneurs just like you successfully sell their businesses in the UK and worldwide.

With 30 years of experience and a proven system for business sales, we understand what it takes to properly prepare, market, and close a deal that meets your goals.

Don't go it alone when it comes to one of the biggest financial transactions of your life. Partner with an ActionCOACH business coach who will be in your corner every step of the way, advocating for your best interests and empowering you to walk away a winner.

To see what a business coach could do for you, use our find a coach tool to find a certified coach near you. Alternatively, visit our learning centre for free business resources.