So, you’ve worked hard and spent years perfecting your skillset within your industry. You’ve built up a fantastic business and are now looking to take a step back from the coal face and maybe even retire.
What are the options available to you? What will you need to do?
There are many options available to you, which we will explore in later articles. However pretty much all of them will involve third parties taking a long and detailed look at your business in order to assess whether they want to become involved with it. This can be a lengthy process and no one wants to waste their time being turned down, particularly after disclosing so much information about your business to them (Although you will, of course, have got them to sign a Confidentiality Agreement first).
However it pays in terms of time and effort to ensure that you have covered off all the basics before you invite an external third party, or even an internal manager to look through your business. Here’s where you should be checking that you have all necessary documentation in place and up to date:
- Finance and credit control – it goes without saying that your finances will need to be in order and hopefully you have an accountant that has been doing this for you. However aged debt can be problematic and so taking a look at your credit control approach and procedure – or even formalising one – can be invaluable and could even get those aged debt figures down.
- Employment contracts and right to work – have all necessary checks been carried out for new employees? Does everyone have a written statement of employment? Does anything need to be updated? Do you have an office manual detailing all employee procedures, benefits, etc. Should you think about getting one? Are there any informal agreements with anyone that need to be formalised?
- Suppliers – do you have full and correct details about your suppliers on file? Their correct trading name or entity? Do you have strict limits on who can purchase over and above certain levels? Should you? Do you have a written contract with your suppliers? If not, perhaps you should have your own purchase contract and ask them to sign up to it? This will provide certainty for everyone.
- Customers – do you have full and correct details about each customer on file? Their correct trading name or entity? Do you carry out credit checks regularly? Are their limits on their payment terms and purchasing levels? Again, do you have written contracts? If not, you should be sending out your own contracts/ToBs. Do your current contracts need updating?
- Disputes – are there any disputes rumbling or perhaps even in full swing? How are these being dealt with? Have you carried out a cost-benefit analysis of continuing versus settling the dispute? Do you have a legal advisor to help with this process?
- Compliance – is all of your industry-specific compliance in good order and fully up to date? This includes Health and Safety, GDPR, pension obligations, etc.
- Business structure – is this all correct? And fully documented? Whilst a verbal agreement is still an agreement, it is obviously harder to prove and a new third party entering the business will be unaware of these additional obligations and could potentially claim against you for non-disclosure. It is always best to have a written Partnership Agreement or Shareholders’ Agreement, clearly setting out the duties and obligations that everyone has signed up to. Failing to do this could mean you are left without a resolution if relationships turn sour.
- Property – do you own the property where the business is based? Or do you have a Lease? What are its terms? When will it renew? Are there any outstanding issues?
Getting all your ducks in a row before inviting in a third party or selling your business is key to making the entire process as painless as possible. We can help with all of these areas. Contact us on 0333 400 4499 for more information.