There are few businesses, and even fewer business owners, who last forever. Whether you’re considering retirement or you simply need a fresh challenge, you will need a well thought-out plan for handing over the reins.

I’m currently advising a group of directors who are looking to sell their automotive engineering business into a market not yet fully recovered from the recession. However, I’m confident that we can give them the value they deserve from their years of hard work and applied talent, by following a few crucial yet common-sense strategies:

1. Appoint advisers. Early on you’ll need someone to approach potential purchasers. It’s rarely a good idea to contact them directly yourself, as you can look desperate and give away value unnecessarily. Besides, you should be still running your business, not spending your day hawking it around! Also, choose a solicitor with proven experience in drafting sale agreements.

2. Tidy the books. Buyers will expect a dossier of financial information, comprehensive and neatly presented. Have your latest accounts audited at the earliest opportunity, rather than waiting until filing deadlines. Provide the most recent management accounts too, and have answers prepared for all likely questions.

They will assume that if you can’t manage the numbers, then the rest of the business is in a mess too.

3. Demonstrate growth potential. Although past results are important to you in showcasing the business, they really mean nothing to the purchasers, who will only benefit from the future. You need to provide a rationale for how revenue and profits could grow under their ownership.

4. Make yourself redundant. Anyone buying your business will want to see that it can operate without you. Ensure your customers don’t depend on you personally, and train staff to undertake every aspect of your work. Write down guides to all your systems and processes, so that everything would still function efficiently if you were to take a year off starting tomorrow.

5. Give yourself time. Most businesses need at least a year to organise things as described above.

If you feel under pressure to sell when you’re not ready, or to accept the first offer, you’ll rarely get the best result.

* Do you have a question for Jon Cooper? You can submit it by e-mailing to jon@jupiterdawn.com