Preparing your business for sale

There are many reasons why people put their businesses up for sale. It may be to reap the rewards of long years of hard work and sacrifice, or to make the most of a super opportunity. Alternatively, it may be the case that they just wish to move the business on as succession planning.

Whatever the motivation, the key to a successful outcome is often in the positioning of the business before it goes on the market. No business is perfect, and it is often not profitable to suggest that your business is the best of its kind.

Instead, what makes it a strategic purchase, is if you can position your business to show how it would make a buyer’s business better. The subtle distinction can convert into a significant uptick in capital gain. 

The other essential element is preparation. I like to make a sporting metaphor here, which is you have to be on the front foot to move forward. If you end up on the backfoot, you lose control and will move backwards rapidly – never a good thing! 

So, please do look at your business from root to branch before showing it to potential buyers. Make sure obvious things are done, such as having happy customers and happy employees. Do a dry run on what due diligence a buyer may focus upon. For example, you know your business inside out, so start from its profit line and work backwards through each cost line. Going back to the theme of making your business more appealing to a buyer, there may be synergies and cost savings you can highlight, that would appeal to a buyer.

There are many common issues which surface during a sales process and some of these can be predicted.  For instance, you need to have a clear story for the history of the ownership. If there have been any changes in the shareholding structure, or any share buybacks etc, these should be brought out in clear detail. 

Make sure all customer and supplier contracts are signed, dated and even exist. If they do not, ask yourself whether that is normal for your business? If it is, then that is fine.

In respect of employees, make sure that terms and conditions are demonstrable and that you are compliant with current employment legislation. All employees are important, but some are more important than others, so make sure your key people are motivated and incentivised. Any buyer will be very focused on continuity after you are gone. 

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R


Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.


Mills & Reeve system for employees.