Develop an exit strategy

Selling your business for the best price may involve getting advice from a corporate finance team which brings you its experience, skill and credibility - and should also encourage several prospective buyers to come forward. More than one buyer makes for an auction, and auctions make for better prices.

Sweetheart deals - selling to someone you know or do business with - is a popular strategy for people retiring from a business. But they are almost always bad deals for the seller. Having got your price, how can you be sure you will get your money? Warranties, missed earn outs and bad tax advice could take 70% of the headline price out of your pocket.

Getting the best deal

These are pointers to make sure you get the best result in selling up:

Even if your business is not in the greatest of shape, selling an operating business, even one that is in trouble, almost always brings more money than closing it down and selling off the assets
Make a number of presentations to the advisers who can help you with the sale. See at least three - preferably on the same day so that you can compare their good and bad points more easily
Find advisers who are the right size for your deal. There is no point in getting the best people at selling a £20 million business when your company is worth £250,000
Everything to do with selling up is negotiable. The corporate finance advisers will want up front payments and high results-related rewards. You can get everything done on contingency, and pay a smaller percentage the more the business goes for
During the due diligence process, which involves answering specific enquiries from prospective purchasers, make sure you get every skeleton out of the closet. Otherwise, you could be sued later for compensation for any liability that was not declared
Whatever the logic put forward for the offer price, it is just a yardstick
Your share of whatever the business sells for will be a lot less if you do not get good tax advice. Owners can end up paying between nothing and 51% tax on any gain
Once your business is on an upward trend, your future projections will look much more plausible to a potential buyer. You should certainly have a business plan and strategic projections for at least three years.