Three factors that can devalue a business being sold are: 1. Non-confidentiality - openly disclosing a business is for sale can cause suppliers and customers to lose confidence and take their business elsewhere. Confidentiality is vital for a successful sale. 2. Changing the way you run the business - continuing normal operations shows buyers the true value of the business. Cutting back could cause the sale to fall through. 3. Taking out too much undeclared cash - this falsely lowers reported profits and turnover, significantly decreasing the assessed value of the business in the sale. Maintaining accurate financial records is important.

1. 3 Factors That Devalue Your Business
Thinkingof sellingyourbusiness?Maybe youare justfeelingthe needtomove onto somethingnew,or
youmightwant to retire afterrunningyourbusinessformanyyears.Whateveryourmotivation,the sale
of a businesscanbe a long,complicatedandemotionalprocessif youare notproperlyprepared.
It isestimatedthat10-15% of the UK's 3 millionbusinessesare lookingtosell orchange ownershipat
any giventime.The sadfactis that onlyone in10 businessesthatgotomarketwill actuallyendina sale.
To give yourbusinessthe bestchance of a successful sale,ata fairprice,youneedtoensure thatyou
avoidall factorswhichcouldpotentiallydevalue yourbusiness.
Non-Confidentiality
The sale of a businesscanoftentake longerthana yearto complete.Openlydisclosingthe factthat itis
inthe marketcan have a detrimental effectonthe business.Suppliersmightgetnervousanddoubtthe
strengthof the company'scash flow,resultinginareductionof creditlines.People ingeneral havea
tendencytoexpectthe worstandyour customersare no different.Theymightthinkyourbusinessisin
financial trouble resultingindecisionstorather"jumpthe sinkingship"before itistoolate - thereby
takingtheirbusinesselsewhere.The same canbe saidfor employees.Youdonot wantto findyourself
ina positionwhere mostof yourkeyemployeesleave the companybeforethe sale isconcluded.
Confidentialityisvital forthe successfulsale of abusiness.
Changingthe wayyou runthe business
Once the decisionismade tosell yourbusiness,don'tstopwhatyouare doing.Itis easyto fall intothe
trap of leavingissuestobe sortedoutby the new owner.Thiscan resultinthe sale of the business
fallingflatshortlybefore completion.Buyersare mostcritical of yourmostrecentactivitysodon't cut
back on marketingorcustomercare.Run the businessasif youwill still ownitinanotherfive year's
time.Runyour businessinthe same manneras youdidwhenyoubuiltitup to be the successful venture
youwentto marketwith.
Takingout too muchcash

2. If you owna cashbusiness,itcouldbe temptingtotake outcash whichyoudo not declare.Apartfrom
the legal implicationsof thisaction,it alsoaffectsthe value of yourbusiness.Ineffectyoudeclare that
the businessturnsoverlessthanitdoesinreality,whichmeansyourprofitisreflectedasbeinglower
than itis.Since the value of a businesstakesintoaccountthe turnoverandprofit,takingundeclared
cash out will have amassivelynegativeimpactonthe value of yourbusiness.
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