How can I sell off part of my business?

I’m thinking of selling off an arm of my business to concentrate on other avenues. I’ve had it valued at £600,000. Should I use a broker for the deal or is it something my lawyer would be able to handle?

A. David Soskin of writes:

My first piece of advice is to get more than one valuation. There are so many ways to value a business – assets, sales, profits, growth rates and market share are all key elements. Valuation is an art not a science and much will depend on the state of the market. If there are many buyers with deep pockets, a business will fetch more than if there are only a few buyers and those few are mired in debt. And do not base your choice of adviser on who gives you the highest valuation as this may be just a tactic to win your sales mandate.

You should talk to several advisers. Certainly a broker is an option, especially if it is someone with a strong track record in your business area – and who knows the likely purchasers.

Another possibility is indeed a lawyer, though you will want a lawyer who has experience of selling companies. Solicitors tend to charge for their hours so you would need to know in advance the time range the lawyer is suggesting and make sure you cap it. Otherwise they are merely incentivised to keep the process going for as long as possible.

Who are your auditors? Many accounting firms now offer corporate finance services so you should find out whether or not they offer this service.

Whoever you choose, do base their fee on the upside – for example on how much more than the £600,000 originally suggested they can get for you. Finally, take references. Speak to at least three business owners and make sure that they have been happy sellers.


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