Tips for selling a business

Preparing a business for sale

There comes a time in every subpostmaster’s working life when they will want to consider their options for the future. Whether that is considering retirement or moving on to pastures new, they will need to contemplate the sale of their business and possibly their business premises as well. When this time comes, in order to obtain the best price and sell on a reasonable timescale, it is vital to prepare as far ahead as possible. How far ahead really depends upon the exact reason for the need to sell. The drive for the sale though will generally have an effect on what can be done in the time available.

 

Timing Is Everything

In the case of ill health, there isn't always a lot of time to prepare and action may need to be taken quickly. The basic principles are the same though whatever the timescale but the time frame may need to be compressed and short cuts taken. However, where there is time to prepare, there are a number of things to sort out that come into the "get your ducks lined up" category.

Where possible, subpostmasters should be looking ahead to what their general exit strategy will be given their own particular circumstances and in an ideal world, they should be thinking about what they are going to do three years ahead. The main reason for this is that there are a number of things that will help attract a buyer to a business and they often take time to get right but if they are taken care of in a logical order, they will make a business more saleable and will help achieve a higher price.

 

Property Preparation

On the property side of things, whether the premises is leasehold or freehold, it is important to get any outstanding maintenance issues sorted to ensure that the shop is presentable and looking as good as it can be inside and inside and out. This could be things as simple as basic cleaning but could go right up to ensuring any maintenance issues pointed out by a landlord are taken care of. All buyers of the freehold of a property will normally carry a survey that may expose maintenance issues that haven't been attended to and this could give a buyer an opportunity to negotiate the price downwards. Make sure all equipment such as CCTV and chillers are all in correct working order and all servicing is up to date.

 

Providing Correct Information for a Buyer

The most crucial area to get right though is the financial information that any buyer is going to want to see before they even consider making an offer. It is absolutely essential to have three full year’s accounts to give to a purchaser and it is important that these are well presented, up to date and accurately represent the way the business has traded. Remember that these may also be used to raise money from a bank so it won't help a buyer if they are inaccurate, incomplete out of date or covered in coffee stains!

Buyers may occasionally ask to see business bank statements to support the turnover shown in the accounts and while you are not obliged to do so, it is a good idea to supply this information as it adds an extra layer of transparency to the transaction. If you are asked though, it is important to ensure there are no anomalies such as bounced cheques or rejected direct debits in there. Ensure that VAT returns are up to date as you may be asked for these also.

 

Other Things to Think About

Make up a folder with all of the information on things like utility suppliers, maintenance contracts on chillers and anything connected to the running of the store. IF there is any equipment on finance, this must be settled before a sale goes through. The general idea is that things are made as easy for the buyer as possible and what they will see as a result is a well run, efficient operation that they can hopefully build on. By doing that, you will help achieve your businesses maximum value.

 

Checklist

  • Try and plan your exit from your Post Office as far ahead as you can
  • Deal with any maintenance issues and ensure your store looks it's best inside and out
  • Ensure all shop equipment is in good working order
  • Make sure your accounts are up to date and well presented
  • Provide all information regarding anything to do with the day to day running of the store
  • Make life as easy for a buyer as possible and be prepared to supply any extra information requested without objection