Helping your clients prepare their business for sale: a guide

When a client is considering selling their business, your role as an accountant becomes more crucial than ever. Selling a company can be a battle between the head and the heart, so being an impartial and confident presence is key to ensure they maximise the value and avoid costly pitfalls.

Here’s how you can support them every step of the way:

Ensure financial documentation is in top shape
Clear, accurate and current financial information is vital to any successful business sale. As their accountant, you’ll likely be responsible for preparing key documents such as:

• The last three years of profit and loss statements
• An up-to-date balance sheet
• Copies of your current lease, annual service charge costs, and business rates schedules

Buyers will use this information to assess financial health and risks. Additional assets that will serve due diligence will also help, such as:

• A list of shareholders and directors
• The company registration document
• Bank statements
• Details of taxes paid and proof of payments
• Evidence of operational structure, procurement methods and ongoing contracts
• Trademarks, patents and copyright information
• A representation of the employee structure, and their contracts
• Any legal risks that could affect the rights or obligations of the buyer

Helping your client present a well-organised, transparent financial picture increases buyer confidence and expedites the sale process.

Encourage investment in people and processes

A knowledgeable and well-trained team is a business’s most valuable asset, especially in service-based sectors like hospitality and leisure. If your client stops making an effort with their team, morale could decrease and performance could suffer, devaluing the business. Advise them to maintain or increase investment in staff training and leadership development.

Minimise dependency on key clients

Relying too much on a few customers increases risk for the buyer, given that their ongoing custom could be your relationship with them. Encourage your clients to review their customer base, identifying over-reliance and opportunity. Marketing through new channels, diversification and networking outside of one’s market can help to land new customers and improve the business's valuation.

Preserve customer loyalty

Long-standing relationships are incredibly valuable and should be capitalised upon. Encourage clients to collect reviews and present case studies; demonstrating strong retention and goodwill will significantly increase buyer interest.

Support continued investment

Some business owners lose interest once they’ve decided to sell, but a stagnating business is harder to sell – and less valuable. Help clients assess where investment (in people and assets) could produce visible benefits. Even small operational upgrades, such as EPOS systems, can improve saleability and strengthen the narrative of a growing, well-run business.

Highlight opportunities

Profitability is also measured as part of the valuation. As their accountant, you’re best placed to identify opportunities to boost profit margins. Whether through stock management, pricing strategies, or staffing changes, a business that shows improving profitability prior to sale is far more likely to sell for more.

Reaching out when needed

Selling a business involves legal, commercial and emotional challenges. If you feel that your client needs additional support, introducing them to trusted professionals with relevant experience could make all the difference and improve their faith in your services too.

Partnering with the right people

Through Practice Portfolio, we can connect you with trusted business agents to ensure each stage of your client’s business sale is handled swiftly and professionally. From helping prepare documentation to identifying reliable valuation and brokerage support, we’re here to provide a bespoke service to you and your client’s requirements.