Valuations, due diligence and finance are critically important. It can be difficult to measure the true value of a business but in general the approach taken is a multiple of turnover or profit averaged over a 3 or 5 year period.
Due diligence is crucial from a purchasers point of view in order to test the valuation and ascertain if there are circumstances which might give rise to difficulties. A seller should review the business before sale to identify the best method of sale which can be to either sell the company or sell some or part of the assets of the company. Raising finance to secure the purchase needs careful consideration to ensure that regulations set out in the Companies Act 2014 are not infringed. Succession planning is often an important element of selling a business and there are often many possible options including pre-sale planning to avail of significant tax reliefs.