ENABLING YOU TO LEAVE ON THE RIGHT TERMS

GROOM THE BUSINESS FOR SALE

The process of 'grooming' a company for sale can significantly improve both the value of a company as well as the chance of achieving a successful sale. There are a number of things which can be done, some of which are dependent on the time available because you can be certain that any 'grooming' undertaken rashly will soon be spotted by potential purchasers. Typically and obviously depending on individual circumstances a period of 6 months to 2 years is required.

Here is a sample of some of the more obvious and common tasks which may need to be undertaken :

  • Examine the company's dependence on either one or too small a number of customers.
  • If there are any provisions in place, which have been adopted to reduce profits, remove them.
  • Remove as many links as possible between the company and the owners' standard of living or lifestyle, particularly the scale of benefits (P11D or otherwise), not forgetting drawings.
  • Investigate as many opportunities as possible for cost reduction, which will not damage the company's activities.


  • Examine the contracts of any key employees as the possible loss of any of those, post sale, might inhibit potential buyers.
  • Curtail as much Capital expenditure as possible. The addition of a new IT system, for example will not add commensurate value and indeed may see the company devalued by as much as the debt incurred.
  • Marketing initiatives, such as low pricing, need to be removed.
  • If there are any assets, cash, investments etc., which are either not required by the business or would not be fully valued, remove them. A typical example of this might be a freehold property, which if retained by the owner can always be leased back to the company and in addition provide a stream of income from the rental.
  • Revalue remaining assets to maximise value in the accounts.
  • The importance of 'grooming' for sale should not be underestimated. Remember the whole purpose of Exit Planning is to ensure that you end up with the maximum cash in your pocket.