Want to sell the business, but don't know how or when? Let Insider's Kurt Jacobs take you gently through the bitter sweet process of how to market your life's work.
You come down to breakfast without your usual bounce and zest for life. After umpteen years building the business the enterprise doesn't carry quite the same zing. Perhaps it's time to sell up, take the money and actually do all those things you've promised your spouse.
And being of a practical mind three things turn over in your mind as you eat your bowl of cereal and slurp tea. How long will this take? How do I do it? How much will it cost me?
But don't reckon on retiring within the next few weeks: divesting yourself of a business is as complex as launching one and can take months, if not years, to complete properly.
The feeling among most experts is that, if you had any thoughts about selling your business to meet the April 2008 deadline to avoid a near doubling in Capital Gains Tax, dispel them now. Unless you are well, well down the road to completing a sale, you're too late.
Neil Gray, corporate finance director at accountancy firm Tenon, says: "If you've identified a buyer you are looking at three to four months for a sale. If you haven't identified one you're looking to at least six months, realistically eight to nine months.
"But that's assuming the business is ready for sale. If your business is not ready - and most are not - you can add 12 to 18 months. To most people, if you want to maximise value, selling a business it is a two- year process."
Peter McLintock, head of corporate at law firm Hammonds in Birmingham, adds: "The most important decision a vendor makes on selling his shares in his company is when to sell.
"But before even reaching that decision the business must ensure that its house is in order, ideally being able to show previous year's results, clear visibility of the current numbers and growth prospects. From this perspective the period approaching a company's year end is a good time to go to market."
The word bandied around by most pundits for timescale is grooming - and this is where the true art of selling a business arises, ensuring a company is in the best possible state to sell and maximising its earnings potential.
Grooming is doing the housework to make sure all is in order for due diligence, driving profits to an attractive level and reducing costs as far as possible.
Is it worth doing? Well Gray estimates that the grooming process can add up to 50 per cent of the value of a business. Generally smaller "lifestyle" companies gain more from the process because they tend to be less well organised, have fewer systems and are more personality-dominated.
Cost controls come naturally to most business people, but it is still worthwhile exercising tight credit management and stock control to improve working capital, as well as confirming realistic provisions for bad debt and accounting irregularities.
However, most entrepreneurs, naturally, tend to concentrate on the profitability and costs and tend to ignore the house keeping side of a business. They are not interested in paperwork or don't operate with the strict definitions of contracts - most business is done on the basis of trust or mutual understanding.
McLintock adds: "A seller must step into a buyer's shoes and anticipate value-threatening issues and fix them if possible.
"Whether it be a pension fund deficit, the need to have intellectual property ownership in the right hands, resolving tax investigations or major litigation, or having a solution for important contracts which might otherwise be re-negotiable upon a change of ownership, all potential obstacles must be addressed prior to sale and, ideally, prior to the process commencing."
It is vital to ensure key elements of the business are in a sellable state, including having assets in good condition, making sure IT systems are running smoothly and formalising verbal agreements with customers and suppliers.
Duncan Taylor, corporate services partner at law firm Nelsons, says: "There will be situations where terms and conditions of employment are out of date, or there's uncertainty as regards the strength of a contract with a supplier. Fail to address issues like these and there's the strong possibility that a purchaser's solicitor will demand indemnity on aspects of a sale."
It is important to be clear about what is being sold: is the business being sold with assets in situ as a going concern, or are the assets being sold for removal from the premises?
A valuation of the assets is required and title needs to be established as there may be assets subject to finance. Raw materials, finished goods and any work in progress also need to be valued.
Accountants will need to look at the debtor book and any ongoing contracts.
The relationship between a business and its property also needs addressing. Property is frequently a company's forgotten asset, but often its most valuable. The issue of who actually owns the plot of ground on which you have lovingly built your business is often a dealmaker or breaker.
And even if the company is in leased accommodation, the terms, lengths, costs and break agreements are still important.
Matthew Proudlove, corporate finance director at Cooper Parry, says: "If the company owns a freehold property, the market value can be lost if it is included within a company sale. Vendors should consider extracting the property from the company, either into personal ownership, a trust or pension fund.
"The information that a vendor's adviser prepares should make buyers aware of the true market value and lead them to build that into their offer."
But any sale also needs to look at a business's soft assets, most notably its people. Management consistency is key: buyers are wary that the goodwill could be lost when the owner-managers depart, post completion.
So a vendor should groom their management team to take on more responsibility, and reduce their own involvement over time.
And who in the management team should you tell? In recent years many businesses have taken an open policy - letting management and staff into the fact a deal is taking place from the outset and keeping them informed of major developments.
Most pundits' advice, though, is to keep schtum, and the schtummer the better.
Proudlove adds: "Confidentiality is of paramount importance. It is vital to limit the number of people who know about the exit planning. Knowledge of impending sale can unnerve employees, customers and suppliers, as well as supplying competitors with ammunition.
"We would recommend conversations on confidential phone lines, such as mobiles, and the setting up of private email addresses. Meetings are usually better held off-site at advisers' offices."
Now you're ready to sell, but to whom?
This is worthy of a feature itself, but, essentially a sale is made to one of three groups - the management, a financial institution, or a trade buyer.
A management buyout (MBO) is a confidential route for achieving an exit, as well as rewarding loyal management with the opportunity to purchase the business it has helped build up. However, an MBO will usually be at a discount to a trade sale, as a management team will be limited by the amount it can raise from funders and will have no synergies to build in.
If it's external, then a sales memorandum, the marketing document initially sent to potential buyers, needs to be prepared. It should reveal hard facts, but portray the business as attractive, illustrating its potential.
David Robertson, chief executive of asset-based lender Bibby Financial Services, recommends at this stage being fairly promiscuous.
He adds: "Anonymously approach around 30 potential buyers to gauge interest. Ensure your adviser has drawn up a confidentiality agreement, detailing all the hard facts relating to the terms of the sale, for interested buyers to sign. Then size up the offers."
Increasingly the greatest value is being squeezed out of sales through an auction process.
Richard Mascall of auctioneering house SHM Smith Hodgkinson says: "The current method in vogue is sale by online auction, where prospective purchasers log on to the auctioneers website and place a bid via the internet.
"The assets can be protected from an undervalue sale by setting a reserve price. The assets can be at numerous physical locations, but must only be in one sale. As the auction is conducted online, anyone in the world has the ability to bid opening up the auction to a truly global audience."
And how much will all this professional advice cost? As a rule of thumb look to about 5 per cent of the value of the consideration, so a £35m transaction will cost £325,000 in professional advice. It will rarely be less than £350,000 because advisers have basic rates that have to be considered.
Once a purchaser has been agreed on, a heads of terms - outlining the deal - will be issued and the vendor will receive a due diligence request for information and documents.
Then, hopefully, one day you will sit in the bank's office and be told that the money has been transferred and you are minus one business but plus a good deal of money.
And prepare to feel a little deflated. Gray says: "People have an inflated view of what their business is worth. We all have an inflated view of assets, but that doesn't mean that should call off the whole process."
Taylor adds: "You need to start this whole process with a mindset where they you are ready to sell, emotionally as well as practically. I've dealt with one businessman who has had a go at selling and aborted it, twice. There is a lot of ego in this: there's always a mindset of "how am I going to sell my baby?'"