Home to The Successful Founder Print & Digital Magazine 
Advice Articles, Interviews, Founder & Brand Spotlights 
Home of The Most Advice-Feature-Rich Entrepreneurship Magazine Around

How to prepare a business for sale

Dave Paterson, a Partner in the Corporate law team at Blacks Solicitors, discusses what business owners need to know if they’re considering selling their business and how to make it attractive to potential buyers.

Growing a business from scratch can involve a significant amount of time, money, emotion and effort. However, there comes a time when most owners want to sell up. Selling a business is a complex process which requires a number of key considerations to ensure a maximum return on the original investment.

There are lots of factors which can dictate the sale, from generating interest with the right buyers, to the price that they’re willing to pay. Planning for exit and implementing a number of good business practices and disciplines will make the sale much smoother and enhance the value of the business.

Ensuring that a business is ‘sale ready’ from the outset will make it more attractive to potential buyers when it comes to selling it and make the sale process that much smoother. This will also reduce the chances of any issues during the transaction process.

Don’t forget to consider whether it’s the best time to sell for the business. Continuity is important to long-term success and by speaking to financial and tax advisers there may be an intelligent way to time the sale in order to take advantage of tax savings.

The countdown
Business owners should begin planning for the sale of their business three to five years before it’s put into action. However, this does depend on what shape the business is in and the life circumstances of the seller, and potential purchasers. 

The earlier you start, the more time you’ll have to identify any gaps in the business and opportunities to sharpen it up and make it more attractive to potential purchasers. Competitive tension when selling a business will secure a strong sale price, and give the seller options as to who they might want to sell their business to.

Prior to the sale commencing, obtain a business valuation to give yourself a realistic idea of what the market worth is of your business. This will in turn help to assess the sale strategy and how the drafting of any legal or supporting documents can move forward.

Potential purchasers

Once a potential purchaser has been identified, it’s important to ascertain information about them and ensure due diligence checks are carried out. By having the knowledge of their financial situation and whether they are the best person for the purchase, you’ll ensure the ongoing success of the business.

If you are approached by a purchaser, never mention a price as this will act as a ceiling and prevent the potential for a higher offer from the buyer. Also make sure your finances are up to date and organised. This makes due diligence work much simpler to work through and will ensure a quicker sale.

You should also ensure that you have absolute Intellectual Property rights to any products and services before starting a sales process. Purchasers will be keen to know this prior to the agreement.

Incentivising staff

People are the key assets in most businesses and it’s important to know that they’re committed, whether that be contractually or otherwise. 

If you’re preparing a business for sale, ensuring key members of your team are committed to the business post sale will be particularly important to any buyer. If staff or directors with key client relationships aren’t enamoured with the potential business acquirer, it might also be worth incentivising them with a long-term incentive plan (LTIP), or share options.


Unless provided for to the contrary in the Articles of Association and/or a shareholders’ agreement, one shareholder can’t force another to sell their shares. However, if you have ‘come along’ or ‘drag along’ obligations, you can create a contractual position where a majority of the shareholders can require the minority shareholders to sell their shares on the same terms as the majority shareholders. 

Customer relationships

Customer relationships are key for potential purchasers because that’s where the sales come from. If customer contracts or framework agreements are coming to an end, or there are onerous terms, they will often be used as price chips.

Are there any change of control provisions in your customer (or supplier) contracts which would entitle the other party to terminate the contract after a change of ownership? If you do have any change of control clauses this could be fatal to the deal and it might be worth considering renegotiating such clauses so that you don’t lose value or the deal.


Get the structure right so you have your property where you want it. Do you want to sell the property with the business, or take it out and, post completion, have an income through renting the property to the new buyer? Would you want the property in a separate company or perhaps in your pension? 


It’s good culture for a business to be receptive to CSR activities. If you have a culture that is 50 years out of date and your potential acquirer has a strong CSR agenda, it may be a challenge for the buyer to bring those two businesses together in the post completion integration phase. Investing in modern practices like CSR activity will open your business up to more opportunities to sell.

Getting it right

To ensure you get it right, keep focused on the business. While focus may be shifted towards engineering the sale of the business, it’s advisable to employ a qualified team of people to ensure the running of the business continues smoothly and successfully. Otherwise, the sale may fall through or the business may lose momentum.

Implementing these strategies, and investing in careful preparation is key to securing the best price possible for your business. Employing a legal team to organise the legal paperwork to ensure there are no complications during the sale process can ensure you get this right. 

By following these suggestions when preparing your business for sale, you’re setting yourself up for a successful search for the perfect buyer, and giving yourself the best opportunity to maximise your return and secure a sale to a buyer you are most comfortable with, particularly in a post-Covid world.

For more information on corporate law matters, please visit https://www.lawblacks.com/business/corporate-law/

Dave Paterson