Most people sell a business once. The consequence is that the sequence is almost always wrong: a buyer appears, heads of terms are signed including a structure nobody has checked, exclusivity is granted — and only then does the seller start dealing with the problems in their own business, while a buyer’s solicitor finds them one at a time.
Structure First, Preparation Second, Market Third
Structure. Asset sale or share sale determines the tax treatment, which liabilities move, whether the employees transfer automatically and which consents are needed. It is very largely a tax question, it belongs with your accountant before heads of terms rather than after, and it is expensive or impossible to reverse once agreed. Preparation. This is where price is genuinely won and lost, and what buyers price is uncertainty: customer contracts that are unwritten, terminable at will, or carry change-of-control clauses; accounts that cannot be reconciled; a lease with little time left or no right to assign; key-person dependency where the business is really you; assets, IP or domains held personally rather than by the company; undocumented employment matters; live disputes. Each of those either cuts the price, converts part of it into a retention or earn-out, or produces a warranty you carry personally. Then market. A business that survives inspection negotiates from strength; one that does not concedes on every finding.
The Rest of the Sequence — and the Figure That Actually Matters
Heads of terms, short and read properly, with real attention to the exclusivity period, which is the part that binds and the part that costs a seller most. Due diligence, where what is found changes the price or the warranties. The agreement and the disclosure letter — and it is the disclosure letter, not the agreement, that limits what a seller is personally exposed to afterwards. Consents, started early, because landlord, bank, lessor and key-customer consents set the timetable rather than follow it. Completion, and after. Which brings the point every seller should absorb before comparing offers: the headline price and the money that reaches your account are different figures. A retention may be held against warranty claims; part may be deferred to dates after completion; part may be an earn-out contingent on results you no longer control. Each is a risk you carry and each is negotiable — and a seller comparing two offers should compare what actually arrives, not what is announced.
Thinking About Selling in the Next Year or Two?
The most valuable conversation is the earliest one: structure with your accountant, and an honest list of what needs fixing before anyone looks. Both are cheaper now than as concessions later.
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