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A comprehensive guide to selling a business and disposing of assets

As a business owner, deciding to sell up and divest assets is a moment that requires strategic planning, informed decision-making, and several considerations.

In this guide, we’ll walk you through the five main stages of the selling process, offering valuable insights to support you during the awareness and consideration stages. Additionally, we’ll explore how The BPI Group presents a revolutionary alternative to traditional business selling methods, ensuring a streamlined, efficient, and profitable asset disposal experience:

  • BPI Asset Disposal Solutions is the go-to place for businesses requiring hassle-free asset disposal services.
  • BPI Auctions is the nation’s No.1 online marketplace for industry and presents sales in front of thousands of pre-registered companies and individuals
  • BPI Asset Advisory is an RICS-regulated team of specialist surveyors delivering accurate valuations, uncompromised disposal advice and RICS standards for instructions, including corporate recovery, secured lending, accounts and insurance valuations across the UK.

The five main stages of selling a business process:

Before you start, identify your reasons for selling your business, as this is one of the first questions a potential buyer will ask you, whether it is down to retirement, partnership disputes, illness, becoming overworked or spending more time with family.

This will help you understand the business’s sales ability, readiness, and timescale expectations. Timing is everything, and that time includes the preparation to sell off your business. Some owners consider selling the business when it is not profitable, making it harder to attract buyers.

Prepare for the sale as early as possible, preferably a year or two ahead of time and focus on making your business an enticing investment. There are many attributes that can make your business appear more attractive, including a strong customer base, healthy profits, consistent income figures, and long-term contracts with clients. These improvements will also ease the transition for the buyer and keep the business running smoothly.

  1. Valuation and Preparation:
    Before selling a business, conducting a thorough assessment of your assets is crucial. To accomplish this, locate and employ a company appraiser to obtain a valuation. An appraiser will thoroughly justify the company’s value as soon as you employ them. The document can be used as a guide for your listing price and will lend legitimacy to the asking price. You may also use certain important measures to figure out how much your firm is worth altogether. Examine your business using indicators such as book value, earnings multipliers, market capitalisation, and others.
    BPI can help by providing expert valuations and trustworthy advice, allowing you to determine the fair market value of your physical assets.
  2. Working with a Qualified Broker or Advisor:
    You can reduce costs by selling a company yourself rather than having to pay a broker’s commission, especially if the sale is to a dependable relative or a present employee. In other cases, a broker can assist you to achieve the best price while keeping the transaction quiet or freeing your time to continue operating your firm. Make sure to talk to the broker about expectations and advertisements and stay in close contact.
  3. Marketing and Buyer Screening:
    Finding the right buyer can be a challenge. BPI employs proactive marketing strategies to present your sales to thousands of pre-registered companies and individuals. This approach places your sale in front of thousands of potential buyers, boosting margins and offering total control of the sale process (with reserves), a unique advantage over traditional methods.
  4. Negotiation and due diligence:
    The negotiation stage in selling a business is critical to facilitating a comprehensive understanding between the buyer and the seller. Negotiations involve initial offers, counteroffers, and culminate in a Letter of Intent (LOI) outlining key terms. Following negotiations, sellers should undergo meticulous due diligence of financial, operational, legal, customer, and employee aspects to validate information. Successful completion of these stages ensures both parties share a clear understanding, enabling a smooth transition of ownership. Maintaining confidentiality and adhering to a well-managed timeline throughout is crucial for a successful business sale.
  5. Closing the deal:
    When closing a deal you need to finalise the purchase agreement, which outlines all terms negotiated in the Letter of Intent. This legally binding document should include the purchase price, payment terms, and any conditions or contingencies agreed in the negotiation stage.
    Following this, you will begin to transfer ownership, exchange funds, and fulfil any remaining conditions. We’d recommend having legal and financial professionals involved to ensure a smooth closing. After the deal is closed, you may assist the buyer in transitioning into the ownership role by providing training, transferring key relationships, and ensuring a seamless handover of responsibilities for a successful transition of the business.

    Each of these stages requires careful consideration, and it’s often advisable to seek the guidance of legal, financial, and business professionals to navigate the complexities of selling a business successfully.

Revolutionising selling a business with BPI Asset Disposal

Selling physical business assets is a strategic approach that can positively influence the overall business sale, providing financial benefits, risk mitigation, and increased focus on core business strengths. The decision to sell physical assets should align with the overall goals and objectives of the business owner to maximise value and optimise the business’s position in the market.

The BPI Group’s unrivalled turnaround times expedite the disposal process, allowing businesses to receive cleared funds in a matter of weeks. Whether selling from your own site or at BPI’s location, the disposal solutions are tailored to meet specific requirements, showcasing the efficiency that sets BPI apart.

How an asset disposal strategy supports the sale of a business:

An asset disposal strategy supports the sale of a business by increasing its appeal to potential buyers, optimising its financial performance, and facilitating a more efficient and straightforward transaction process. Here’s how:

  • Through a thorough assessment, the business can identify surplus assets that may not contribute significantly to its operations or growth prospects. These assets can be earmarked for disposal to optimise the business’s overall value.
  • By disposing of physical assets, the business can streamline its operations, making it more attractive to potential buyers. A focused and efficient operation often appeals to buyers seeking a well-organised and manageable acquisition.
  • Disposing of outdated machinery and equipment mitigates risks for buyers, demonstrates the business’s commitment to efficiency, and builds confidence among potential buyers.

An alternative to selling your business:

BPI’s asset disposal solutions offer a revolutionary alternative to the conventional, time-consuming process of selling a business. Selling physical business assets allows business owners to generate liquidity without transferring ownership of the entire organisation.

Here are some considerations and advantages of selling physical business assets as opposed to selling the entire business:

  • It allows a focused liquidation, selectively monetising certain aspects of the business, such as machinery, equipment or stock while retaining control over the core operations.
  • The business can continue its operations with the remaining assets and focus on its core competencies. This may be preferable for owners who are not ready to exit the business entirely.
  • Selling assets can provide a quick infusion of capital, which can be used to reduce debt, fund expansion plans, or invest in areas of the business with higher growth potential.
  • Selling assets over time provides a phased approach to exit planning, allowing you to gradually transition out of the business without a sudden and complete exit.

By managing the complete disposal process, eliminating third-party services, and reducing unnecessary costs, BPI ensures a swift and hassle-free experience for businesses.

Tailored asset disposal solutions for partial divestment

BPI’s asset disposal solutions can be tailored to businesses aiming for partial divestment or specific asset sales, offering flexibility to meet the company’s specific needs and strategic goals. Here are some ways asset disposal solutions can be designed for partial divestment or specific asset sales:

Asset identification and valuation

BPI conducts detailed assessments to identify specific assets targeted for divestment, providing a fair market value assessment for each asset.

Tailored Disposal Solutions

Tailoring disposal solutions for each set of assets ensures that marketing efforts and listings are customised to maximise the value of each asset.

Online auction platform

BPI utilises its industry-leading auction platform ‘BPI Auctions’ to build a competitive marketplace for assets, ensuring they achieve market value. Similarly, BPI allows for reserve prices to be inputted against assets for vendor peace of mind.

Choosing the right asset disposal solution is critical for businesses looking to divest or sell assets strategically. The BPI group offers a unique and efficient alternative, ensuring businesses achieve maximum returns while maintaining control over their core operations.

Key Takeaways:

  • Thoroughly Assess Assets: Conduct a comprehensive inventory and valuation of all assets to determine their current market value.
  • Understand Strategic Objectives: Clearly define strategic objectives for selling or divesting assets to guide the process effectively.
  • Appoint Expert Advisors: Consider hiring professional advisors, such as BPI, to navigate complex transactions and ensure a smooth process.
  • Post-Transaction Integration: Plan for the integration or transition of the remaining business operations after the asset disposal is complete.

If you’re looking to dispose of assets to maximise business sale proceeds when selling your business or are looking for an alternative to selling your business, contact BPI today to discover how we can tailor a solution to meet your needs and goals, revolutionising your asset disposal experience.

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