BUYING A BUSINESS FAQS

SELLING A BUSINESS FAQS

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BUYING A BUSINESS - FREQUENTLY ASKED QUESTIONS

  • I am interested in a business; how can I see a breakdown of its income?

    Once you have registered with us and signed any necessary NDAs, subject to the seller’s approval, we will supply you with the business’ most recent accounts and management information that is available.

  • Will I retain all the business’ contracts?

    Unless otherwise stipulated within the sale description, the sale of the business will be inclusive of all its contracts and ongoing trade.

  • Will I retain all the business’ staff?

    Unless the sale description stipulates an asset-only sale, the sale of the business will be inclusive of all its staff. Many sellers opt for a confidential sale to provide you with a high level of staff retention at the point of transaction.

  • I would like to make an offer, how does the offer process work?

    Our purchase process protects the interests of the buyer as well as seller. The offer will be put forward by the negotiator on your behalf allowing you to feel 100% comfortable with your acquisition prior to the purchase. The most obvious contingencies to your offer will be:

    • Inspection of financial records to your complete satisfaction.
    • Obtaining financing at a term and rate that is satisfactory to you.
    • Obtaining a lease that is satisfactory (if it’s a leasehold business)
    • Inspection of all the assets of the business to be acquired.
    • Obtaining all licenses and permits required to operate the business.
    • Discussions with key personnel to ensure that they will stay with you.
  • I’m a first-time buyer, what skills or qualities do I need to run a business successfully?

    Before you decide to buy a business, consider your background, education and training. Bearing these in mind will help you to identify your interests and talents to choose a business that will drive you to succeed and that you will enjoy running. It is vital to buy a business that is the right fit for your skillset and experience. Having a knowledge of the industry reduces the learning curve and enables you to run the business. If you are lacking in knowledge and/or experience, then there are business opportunities which already have experienced management teams working under the owners stewardship. In Addition, you may want to negotiate a hand over period where the vendor will assist you with understanding how to operate and manage the business.

  • What types of business structures are available on the market?

    There are several different types of business structures available. Sole traders, limited companies and different partnership types are the main ones. The different types of business structures will define the legal aspect in terms of the paperwork, taxes the business will be required to pay and determine how profits and losses will be shared. Considering all the options at this stage will make help you to determine the right type of business structure for you and can often save time and money as the business develops.

  • What is the difference between a freehold and leasehold sale?

    In a freehold sale, you will purchase both the ownership of the business and the premises in which it is contained. In a leasehold sale, you will purchase ownership of the business, but the premises will remain under ownership of the current landlord.

  • The business I am interested in is held on a leasehold basis; how does this impact the sale?

    Unless otherwise stipulated, the lease agreement will be inherited by the incoming owner of the business, subject to being approved following the landlord’s due diligence. If you are unhappy with the lease agreement you may be able to end the agreement in accordance with the break clause or negotiate a new lease agreement at the Landlords discretion.

SELLING A BUSINESS - FREQUENTLY ASKED QUESTIONS

  • How long will it take to sell my business?

    This time will vary greatly depending on the business. There are multiple factors to consider; how readily available you are to conduct viewings of your business, the market, the locality, whether you have the right sort of solicitor, and how long the Due Diligence process will take. We advise sellers on every step they can take to speed up the process.

  • How important is confidentiality?

    Confidentiality is vital to maintain the level of staff and client retention throughout the sales process, with most of our clients opting for a confidential sale.

  • How would you appraise my business?

    One of our experienced Associate Directors will pay you and your business a polite visit and conduct a business appraisal. It is in this appraisal where the fundamental details of the sale will be agreed, such as the tenure. During this appraisal, the Associate Director will conduct a market appraisal for your business, and a guide price will be set. This appraisal will be based on both the details of the business, and the current market climate.

  • What will be involved in the due diligence process?

    The buyer will need to carry out legal, commercial and financial due diligence.

  • Can I decide if I sell my business on a freehold or leasehold basis?

    If you own the freehold for your business premises you will have the option to include the bricks and mortar value of your premises within the asking price, or you can choose to retain ownership of the premises and create a lease agreement with the incoming owners, providing you with future rental income. If you currently lease your business premises, you will need to transfer your lease agreement to any incoming owner.

  • I'd like to sell my business. The profit is around xx% gross, is that appealing to a buyer?

    Selling a profitable business is an attractive proposition for a buyer. However, buyers are more interested in looking at net profit rather than gross profit. If you are looking at maximising your business sale profits, find practical ways of enhancing your business profitability by either adding to income or reducing costs, or ideally both.

  • What documentation would a potential buyer want to see?

    A potential buyer will more than likely want to view your past 3 years of full trading accounts and a comprehensive asset list, in addition to copies of any relevant insurance certificates and licences. There may be additional requirements which we can provide guidance upon.

  • Do I need to provide a handover period?

    Depending on how specialist your business is, it may be appropriate to provide a handover period. The seller is asked to stay on as a consultant to help with the transfer. Management and introduction to current clientele base.