Selling your business

Selling your business involves a lot of work. Most of the time is spent on thorough preparation. So it helps to start drawing up a sales plan well in advance. When selling your business, seek advice from an experienced adviser.

How do you sell your business?

First, decide what you want to achieve from the sale and work out how much your business is worth. Then, get your business ready for sale, look for the right buyer, and start negotiating. Once the contracts have been signed, you hand over your business to the new owner and a new chapter will begin for you.

1. Set your goals for selling your business

Decide what you want to achieve through the sale. For example:

• When do you want to sell your business?
• What do you want to achieve through the sale?
• Do you want to keep the business within the family, sell it to someone within the company, or to an external buyer?
• Under what conditions and for what minimum price are you willing to sell it?
• Do you want to remain involved in the business, and if so, in what way?

2. Prepare your business for sale

Before you put your business on the market, make it ready for sale. Ask yourself: how attractive is my business to buyers? At this stage, you need to determine:

• How much is your business worth? 
  You determine the asking price based, amongst other things, on your profits and growth potential. And whether there are any particular risks. For example, are you dependent on just a few customers, and are their contracts due to expire soon?
• How dependent is the business on you?
  If someone from your family or a member of staff is taking over your business, start handing over more and more tasks and responsibilities to them now, so that they will not need you in the future.

3. Find a buyer

In this step, you will look for a buyer. If there is no potential buyer from your family or within the business, there are ways to find a buyer. Ask your accountant or trade association for tips and connections. Or register your business in an anonymous sales database. This lets potential buyers view the information memorandum. Serious candidates can then find more extensive information in a memorandum of sale.

4. Negotiating and signing the sales contract

The sale of your business is in sight. In this phase,  you will negotiate with the buyer. For example, regarding the price and the terms of the transfer. You will also agree on your involvement after the transfer. You will set out these agreements in a declaration of intent.

This is followed by the due diligence process. During this process, the buyer checks whether the information you have provided is accurate. Based on the findings of this process, the buyer may wish to renegotiate. Have you reached an agreement? If so, you will sign the contract of sale and the sale will be finalised.

5. The handover

The handover is a formal moment when the business is transferred to the new owner. You receive the money from the sale, deal with your adminstrative and tax matters, and update the registration details in the Business Register to record the change of ownership. 

6. After the handover

With the sale of your business behind you, it is time to look forward. You may still be involved with your old business, as an advisor or because you provided a loan to the buyer. But you also have more free time and financial means.