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Selling your business (or how to handle the 2nd most important business event of your life!) – by Howard Leigh

The sale of your business will probably be the second most important business event you need to get right, the first being starting your business.

Howard Leigh

Howard Leigh - Senior Partner, Cavendish Corporate Finance LLP

You can never start too early to plan to sell a business. Some people start the planning even before they have started the actual business! Accordingly, they want to create a business that has real capital value. This might mean ensuring the business is not dependent on any one supplier, that it isn’t focused on just one customer or is not reliant on technology or patents which have a short shelf life.

Certainly many entrepreneurs talk to us about steps they need to take at the very early stages of their business and throughout the business life on ensuring that they are maximising the capital value. Whilst businessmen focus on the day to day issues that make a business successful, it is important to take time out to ensure that the business is also enhancing its capital value as it grows.

Sometimes key business decisions will be influenced by the capital objectives. A growth strategy which can be equally achieved by using agents or distributors will be influenced by the impact that it could have on a sale exercise. Likewise, the decision to grow by franchise might initially appear attractive but will not help achieve a higher capital value.

It is also never too early to choose the right advisors. Being comfortable with someone who is going to negotiate for you is imperative, as you want to enter into the negotiation room knowing you have someone next to you who has strong empathy with your objectives and way of doing business.

You also have to be sure you can trust the advisor to be discreet and only contact the purchasers who are really appropriate for you at a time when it suits you not them!

Identifying a purchaser for a business is key; the trick is to cast your net wide initially – often to people outside of your sector or even your industry. Likewise, you want to be absolutely sure you have covered the market internationally. It is imperative you talk to someone with local connections as reliance on a Google search will not do it!

You need to allow sufficient time for these overseas parties to consider a proposal properly. It might be that you talk to overseas purchasers a long time before any local buyers as this will allow them proper time to plan to come to the UK and access the local market.

A mistake which is often made is to agree only outline terms of a deal and rush straight to contract. That’s the point when the balance of power changes and purchasers simply look at opportunities to chip the price. Accordingly, the heads of terms is absolutely key and must include as much detail as possible to avoid an expensive period of due diligence and contract negotiations based on misunderstandings.

Finally, never underestimate the amount of stress a sale exercise will place on the owner(s) of a business and accordingly try to plan when you can cope with these demands.


Senior Partner, Cavendish Corporate Finance LLP

Howard Leigh is the Senior Partner of Cavendish Corporate Finance LLP, the UK leading specialist advisor to entrepreneurs wishing to sell their business.  He is a frequent lecturer, author and broadcaster on mergers and acquisitions and has written the “Good Practice Guideline: Selling a Business”, published by the Institute of Chartered Accountants.

The Academy for Chief Executives is a leading organisation, focused specifically on developing CEO’s and MD’s by helping them to expand their businesses whilst also supporting their individual growth as leaders.  Find out more at

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