Preparing to sell your Business – What is required.

Preparing to sell your Business -What is required.



What is required before selling your business? When preparing your business to sell in the UK,  it is recommended that the business seller (vendor) have all their documents and information (preliminary due diligence) on hand before placing it on the market.

When selling a business, deal momentum is very important. It is not a good idea to disrupt this in any way as it may sabotage the sale. One of the primary culprits to disrupting deal momentum is a seller who has not taken the time to assemble the information a buyer will need to complete their due diligence.

When an excited buyer requests certain information and the seller (or their business agent) cannot supply this without delay, a little bit of their enthusiasm is lost. Do this too many times and chances are, they may be lost for good.

That is why we at Lansley Commercial recommend that the seller prepares their business to sell by having their preliminary due diligence in order before going to the market.

Deal fatigue or a transaction becoming stale is when the transaction drags on for longer than it should. This should be avoided at all costs.

It is recommended that the seller acquire assistance from their business agent, accountant and solicitor when compiling their preliminary due diligence.

Another advantage to having all the information to hand is that it signals to the buyer that the vendor is a serious seller and it creates a sense of haste as they wouldn’t want another buyer to come along and offer a higher figure. In other words, it creates the illusion of competition. The buyer knows that the seller is ‘dressed for success’ and ready to go and if they don’t buy the business, someone else will, and it may even be one of their competitors.

Outlined below, is a list of some of the essential information and documents that a seller should have on hand prior to having their business listed on the market. This is not exhaustive however covers most of what is required to prepare your business to sell in our experience.


1. Full Annual Accounts from the last 3 years

This is a set of comprehensive, preferably audited, financial statements typically produced by the sellers accountant on an annual basis in correlation to the business’s financial year. It will provide a detailed overview of a business’s trading activities and is an essential tool for the buyer to assess the financial health, performance and liquidity of the business being sold.

The accounts usually consist of three primary components.

  • Income Statement / Profit and Loss Statement
  • The Balance Sheet
  • Cash Flow Statement

2. Interim Account Figures

This is the current financial information that falls between year ends. This is a snapshot of a business’s financial performance between the annual reporting periods. This can normally be accessed from a ‘Xero’ or ‘Quick Books’ software program or something similar, or by asking ones accountant to produce them. This gives the buyer an accurate indication of the business’s financial information from the last financial year’s comprehensive report to current.

3. Projected Figures

The buyer will want to know what the seller projects that business can achieve in the next year, what their goals are and how they intend to achieve it. This can provide them with valuable insights into the future performance of the business and see if it aligns with their own plans and projections for your business should they decide to acquire it.

4. Copy of your Commercial Lease

Best to have a scanned, digital copy. This enables the buyer to gleam a lot of helpful information such as whether the lease is renewable or not (inside the Landlord and Tenant act 1954), whether it is fully repairing and insuring or not (FRI), what the rent review terms are, how long is remaining in the lease, who the Landlord is, opening hours, restricted covenants and much more.

5. Excellent Pictures

It is sometimes difficult for the business agent to take good pictures on their visits. Factors such as lighting, cleanliness, staff and customers being around and confidentiality concerns to name a few. Often it is preferable for a seller to take pictures when a business is clean, tidy and empty.

6. Fire Risk Assessment Report / Asbestos Report / EPC Certificate / Commercial Solicitor

Your business agent (Lansley Commercial) will be able to assist you with these essential requirements. Click this link for more information on our website.  Other Services – Lansley Commercial

7. An Inventory List

Everything included in the sale. Fixtures, fittings, equipment and utensils – plus a list of anything not owned or on lease will be required to be listed for the record. This will be required by the solicitors. Normally the business agent or a third party can assist with this. If anything is on lease, details of the monthly payments, how long remaining on the term, and details on the process when the term comes to an end will Also have to be documented. This may include a Schedule of Plight and Condition Report Other Services – Lansley Commercial

8. Employee Details and Contracts

The buyer will want to see the employee contracts, have details of each of their roles, responsibilities, length of service and salary. They will also seek knowledge of any disputes or legal issues that have arisen.

In conclusion, being prepared before selling a business not only streamlines the sales process but it also instils confidence in potential buyers, making that business an attractive proposition in the market enabling the seller to negotiate favourable terms and price and more easily navigate the complexities of the sale process.

We at Lansley Commercial can guide you, the seller, through the process of acquiring preliminary due diligence and answer any other questions that you may have.

Please don’t hesitate to contact us.

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