Five things to do when selling your business

In an ever increasingly challenging market, some restaurant owners are making the decision to close sites in order to consolidate their businesses. In some cases, this will be done by simply closing the venue and surrendering or assigning the lease. However, if the restaurant can be sold as a going concern, it could turn the disposal from a cost-cutting exercise into a profit-making one.

Jessica Nugent, partner at London law firm Goodman Derrick LLP, shares five things you'll need to do if you are looking to sell part or all of your business.

1 Ensure your accounts are in order​
Clean, well prepared accounts will enable a potential purchaser to identify the business’ assets and liabilities, which will be key to agreeing a purchase price. If your accounting records have gaps, or if the numbers do not add up, it might cause a cautious purchaser to walk away.

2 Prove you're up to date​
Ensure all licences, assessments and approvals are up to date (alcohol, music, fire safety, health and safety, etc.). A buyer will want guarantees that all legal requirements and recommendations have been complied with.

3 Manage your paperwork​
Make sure you have copies of any material contracts, such as the property lease, supply contracts, hire purchase agreements/equipment leases and banking agreements. The buyer will want to know the cost and duration of these, as well as whether they can be assigned.

4 Appraise your assets​
If the business relies on any key assets, ensure you can provide evidence that you own them or have a lease or licence to use them. This can apply to intangible assets, such as trademarks, logos and websites, as well as tangible assets such as kitchen equipment and computer systems.

5 Think about your employees​
Put together a schedule of all your employees that work in the business that is being sold, as they will most probably transfer to the buyer along with the business. The buyer will want to know details such as salaries, length of service, working hours and holiday entitlement. You will probably be asked to provide right to work documentation for non-UK citizens, so ensure you have up-to-date documents to avoid any problems.

Jessica Nugent is partner at Goodman Derrick LLP​​