Five expert tips to prepare your business for sale

(NC)—Calling all entrepreneurs: Dreaming about a restful retirement in sunnier parts? Better sell the business first and don't wait till the last minute. “Business owners often underestimate the time and effort required to prepare the business for sale or succession,” notes Michael Walker, national director, Aon M&A Transaction Advisory Group.

Walker offers the following five tips to help you prepare your business for sale:

1. Transfer power: Enabling the management team to carry on without you will be a big plus to a purchaser. Build up your management team, and shift sole responsibility away from you. Transfer key personal relationships with suppliers and customers and formalize contracts where possible.

2. Hang on to key employees: To ensure the loyalty of key employees, changes may be needed to incentives and employment terms. Signing employees to employment contracts with confidentiality and/or non-competition clauses may reduce a purchaser's risk, and increase the price they're willing to pay.

3. Clean house: Stay one step ahead of the purchaser and deal with outstanding filings and remittances. Even if it means spending a bit of money to clean the slate, you should settle any legal disputes against the company well ahead of selling.

4. Talk taxes early: Speak to a qualified tax advisor about tax strategies and implications that will affect you personally after a sale or succession to a family member. Some strategies need to be planned years in advance, so start asking questions sooner rather than later.

5. Keep it a secret: Maintaining confidentiality is critical as you prepare to sell. Assemble an external team of advisors to help manage the sale process and reduce the risk of word getting out.

Further information on preparing your business for sale or succession can be found online at www.aon.com.

Source: www.newscanada.com
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