Why do you want to sell? You could be ready to retire or wanting to release capital to start a new venture. Perhaps you’ve had partnership disputes and want to move on.

Whatever your reasons, you should keep your end goal in mind at every step. Whether you have an amount you need it to fetch or a deadline you want to be out by, these objectives will make the process more focused. You should be prepared for the deal to take three to nine months at least, so getting prepared early will be crucial to reaching your goals.

A key part of selling is making your practice as attractive as possible. It’s a bit like preparing a house for sale – you want it looking its best. Here are some steps you can take:

• Build a strong team and with clear objectives
• Fix and/or replace broken equipment
• Settle any disputes with suppliers, employees and clients
• Get all your contracts and leases in order
• Reduce your personal expenses
• Prepare up-to-date accounts – ideally to sell at or just after year end
• Gradually pass owner responsibilities to the management team
• Speak to advisers (tax, legal and accounting)

If you make a profit when you sell your business, you’ll need to pay capital gains tax on anything over your tax-free allowance. However, there are some tax reliefs that can lower the expense:

• Business asset disposal relief – as long as you’ve owned the business for two years as a sole trader or business partner, you could pay a lower rate of 10% in capital gains tax
• Business asset rollover relief – delay paying capital gains tax when you sell some assets if you’re using the money to buy new assets within three years
• Incorporation relief – delay paying capital gains tax when you transfer your business to a company by transferring your business and its assets in return for shares
• Gift hold-over relief – if you are selling a business asset, you can transfer the responsibility of paying the capital gains tax to the buyer

As you’re self-employed, you should tell HMRC as soon as you stop trading. You can do this using an online form. You’ll then need to complete a self-assessment tax return and include the date you stopped trading.

Before you can start negotiations, an agreement called Heads of Terms should be signed. This sets out the terms of a commercial transaction agreed in principle between both parties.

You’ll need legal assistance with setting up this agreement to ensure you are best meeting your objectives.

Once Heads of Terms is in place, negotiations can begin.

Any buyer seriously interested in your practice will carry out rigorous due diligence to ensure they fully understand your business. Be prepared for this – it’s often vigorous and time consuming. Having someone you trust on hand to help you gathering all of this information will definitely help.

To give you an idea, here are some key aspects to look out for:

• Liabilities – pay these off or be transparent about them
• Financial documents – gather detailed documents and tax returns dating back to at least three years (or your first year of business if it’s less than three years old)
• Statutory registers – ensure Companies House and other registers are up to date
• Properties and assets – be clear about what is included in the sale and prepare documents about the lease, if there is one in place
• Shareholders – create clear information about the shareholder position
• Intellectual property – ensure trademarks, copyrights, your company name and domain name are properly protected
• Contracts – review employee, supplier and client contracts to make sure they are all up to date and clear
• Insurance – make sure you have the necessary business insurance in place to cover until the deal has gone through
• Compliance – ensure all your registrations healthy and up to date

Your solicitor will usually take you through this step, helping you review agreements and work towards an agreed sale date.

Here are the main agreements involved:

• Purchase and sale agreements – these cover the terms of the sale
• Lender documents – these will need to be included and reviewed if the buyer is borrowing money to finance the purchase
• Lease agreements – if there is a leased premises or equipment, the lease will need to be assigned to the buyer
• Bill of sale – this document transfers the business assets to the buyer
• Deferred agreement and bonuses – this agrees to release some of the funds and bonuses if future goals and commercial targets are met