Part Three: Preparation for a Transferable Business
In Part Three of our seven-part series, we look at the critical concept of transferability, how to ensure your business can continue to thrive under new ownership. To jump to another section:
- Part One: Assessing Readiness and Appraisal
- Part Two: Being Due Diligence Ready
- Part Three: Preparation for a Transferable Business
- Part Four: Buyer Research and Profiling
- Part Five: A Professional Negotiation
- Part Six: Deal Structures and Payments
- Part Seven: Post-Deal Transition
Buyers aren’t just investing in performance; they’re investing in continuity. Even a profitable business can become difficult to take to market if it’s too dependent on the current owner or held together by undocumented knowledge.
Making your business transferable means building systems, teams, and relationships that endure beyond your involvement.
Why Transferability Matters
Buyers want confidence that the value they are acquiring can be preserved and scaled without disruption.
Every business transaction is different but common buyer concerns include:
- Overreliance on the owner’s relationships or technical knowledge
- Poorly documented operations
- Informal agreements with staff, clients, or suppliers
- Lack of second-tier management or succession planning
Your task, with the help of your advisers, is to minimise these risks.
Steps to Creating a Transferable Business
Reduce Owner Dependency
If your business relies heavily on your personal input – whether in sales, service delivery, or decision-making – now is the time to delegate. Build a leadership team, empower key staff, and reduce day-to-day reliance on your presence. This is ‘making yourself redundant’, in the best sense of the term.
Document Systems and Processes
Operations should be repeatable and teachable. Formalise your processes, from onboarding staff to fulfilling orders and managing customers. This can include:
- Operations manuals
- CRM systems with clear workflows
- Staff training guides
A buyer will value a business that runs on systems, not intuition.
Strengthen Contracts and Relationships
Make sure key contracts with clients, suppliers, and employees are in writing and ideally assignable. Avoid handshake deals.
Buyers will also want reassurance that these relationships can be maintained post-sale.
Build a Stable Management Structure
A second-tier management team is a major asset. Not only does it reduce reliance on the owner, but it helps ensure continuity in culture and decision-making. If you don’t yet have one, consider promoting internally or hiring with exit planning in mind.
Review Technology and Infrastructure
Outdated or informal systems can raise alarm bells. Buyers ideally want businesses with modern, secure, and scalable infrastructure, whether that’s cloud-based systems, secure data handling, or software licences in good order.
The Value of Perception
Buyers are not just evaluating facts, they are assessing risks. A well-prepared business, with clear systems, structure, and contracts, creates a perception of professionalism and reliability.
Altius Corporate Finance advises sellers to think like a buyer: “If you had to step into your own shoes tomorrow, would you know what to do and feel confident doing it?”
Positive changes in organisation and transparency can have a big impact on buyer confidence.
Timing Is Everything
Improving transferability takes time, often months. If you wait until you’re already in negotiations, it may be too late to address buyer concerns without delaying or risking the deal. The earlier you start, the more value you can unlock.
Next Step: Buyer Research and Profiling
Transferability is the bridge between value and saleability. By systemising operations, empowering staff, and professionalising contracts and processes, you create a business that’s built to last – and ready to sell.
In the next article, Part Four: Buyer Research and Profiling, we’ll explore how to understand the buyer landscape and identify who is most likely to purchase your business and why that matters.
For expert support preparing your business for a seamless transition, reach out to Altius Corporate Finance.
