Selling a business combines preparation, disclosure and negotiation. The aim should not be to promise a quick exit but to present the company clearly while protecting its day-to-day operations during buyer discussions.
Practical example
A profitable firm may still be unattractive if its founder controls every customer relationship, documents nothing and refuses a proper handover.
What to check before moving forward
Owner dependence
Assess how dependent the business is on its current owner. If one person brings in customers, runs operations or holds vital know-how, a buyer needs a realistic replacement plan.
Customer concentration
Examine customer mix and reliance on a few major accounts. High revenue can be fragile if it depends on a single contract or the outgoing owner's personal relationships.
A reliable information pack
Prepare a structured information pack with verifiable figures and clear dates. Separate historical performance, forecasts and seller statements; do not present estimates as audited facts.
Valuation methods
Do not treat one valuation multiple as a definitive appraisal. Consider sustainable earnings, assets, risk, growth prospects and genuinely comparable transactions before forming a value range.
People and employment obligations
Understand who performs critical tasks, what know-how sits with employees and what happens after ownership changes. Review contracts, costs and possible employment obligations with specialists.
How to use this guide
Start by requesting sources for each important claim and noting what remains unverified. Cross-check answers against records, visit the operation where appropriate and bring material risks to an adviser before committing. Never fill missing financial figures with your own assumptions.
Evidence worth requesting before you proceed
A sales description is a starting point, not proof. These documents help distinguish verifiable facts from expectations:
- Valuation assumptions and adjustments
- Recurring contracts and customer churn
- Maintenance history and deferred investment
Request information appropriate to the negotiation stage and respect confidentiality arrangements. Sensitive documents may be shared only after a buyer is identified.
Final takeaway
A sound transaction starts by defining what changes hands, checking the facts and documenting the agreement. Use this guide as a map of questions, not a replacement for a review tailored to the actual business.
General information only; not personalised legal, tax or financial advice. Rules depend on the transaction and may change.