Bosses are finding it hard to let go of their business. A third of bosses of small businesses are aged over 60 and should start planning their exit strategy well ahead of retirement. Research by an accountancy firm has shown that business owners underestimate the length of time needed to sell their business.
The majority of business owners plan to use the proceeds from the sale of their company to fund their retirement but a survey by the State of Owner Readiness revealed that over 80% of bosses have no formal transition plan. It is vital to start planning early. Due diligence is the most important thing you can do. Any prospective buyer will perform this task to confirm that what you have told them is true. This is standard business practice and should not be taken personally. They will be looking for potential reasons to reduce the purchase price. Buyers will question everything about your business – don’t feel you are being criticized. Look at your business through the eyes of the buyer and identify any problems and arm yourself with detailed facts. A seller who can answer questions with facts and data will instil confidence in buyers and make the due diligence process easier.
Although you may not need to sell your business at this time circumstances can change very quickly. Illness, financial problems etc may bring about the need to sell. "Preparing yourself and your business will increase your odds of a successful sale when the time comes. Business sales don’t happen quickly – plan at least two years ahead and be aware of the tax implications of a sale. Setting up a Trust could minimise any inheritance tax," stresses Commercial Partner Matthew Fretten.
Our Commercial Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Matthew or a member of the team will be happy to discuss any questions that you may have