Sellers are being advised to plan ahead, make the buyer do the work and be prepared to walk away if a deal changes beyond acceptable limits.

Accountants Grant Thornton reveals firms need to be ruthless following a survey which questioned 51 chief executives from unquoted companies who have offloaded their business for between £10 million and £100 million in the past two years.

Andy Warrilow, corporate finance director, said: "Business owners face a number of challenges when selling their business. For the majority getting the right price was the most pressing concern.

"But loyalty to staff was also a key consideration for a third.

"Post sale contracts like earn outs and warranties were selected as a key challenge by a quarter while finding the right advisor was also an issue for a little over a fifth.

"To overcome these challenges sellers need to plan well ahead, preparing for 18 months to two years, and be robust. If the deal is not right, don't do it."

Some 37 of people sold because investors wanted to realise their return, 22 per cent had a tempting offer and 14 per cent wanted to realise capital for further investment.

Other reasons included retirement after a lifetime's hard work, removing a subsidiary that is a distraction rather than essential to the core business, the market being in long term decline or the business itself being in trouble.

Whatever the reason, the survey showed that having a clear message about the reason for the sale was crucial to getting the best price.

Mr Warrilow said: "Having decided to sell and being clear on why, it is important not to rush the process.

"Grooming the business can really help get the right price.

"Some even recruit new management teams for the purpose and others start three years before the sale.

"For most the sale process took six months with 35 per cent taking between six and twelve months. But for some it was incredibly quick - four per cent said they completed the sale within three months."

Once the decision to sell has been made and the business prepared, there a number of exit options to choose from - selling to a competitor; selling to a private equity firm; a management buyout; a buy-in management buyout; a flotation; earn-outs; and equity release.

Most businesses were valued using a multiple of past earnings, with a third according to projected future earnings. One in every five was viewed by comparison with other businesses and six per cent on the strength of their assets. Seventy-six per cent of valuations were accurate to within ten per cent and for a further 18 per cent they got a boost with the final sale price being much higher than the initial valuation.

Mr Warrilow said: "It is essential that the purchaser does not appear desperate and is instead able to make the buyer court them.

"This will help to avoid a last minute drop in the offer or other similar efforts to reduce the price on the part of the buyer.

"The most popular method was networking. Forty-five per cent of sellers used their own contacts and those of their advisors to find the right buyer. Other methods involved the use of the internet and newspapers or magazines. A lucky eight per cent had to put in no effort, being approached directly.

"The key piece of advice the business owners offered was not to be flattered into focusing on one buyer. If you run with just one the chances of the terms or price being changed at the last minute are much greater and you might have little option but to accept.

"Knowing how the buyer will finance the purchase is a lso important. Cash accounted for 61 per cent, loan stock for 18 per cent, paper for 14 per cent, private equity for another 14 per cent and 12 per cent used venture capital. If a vendor wants the biggest return, accepting some sort of earn out or deferred consider-ation is almost essential."

Once the deal has gone through and the vendor is relaxing in their luxury villa on the Mediterranean, some time should be given to wealth management post-exit.

Mr Warrilow said: "The whole process can be incredibly rewarding and relatively straightforward so long as you adhere to the basic advice. You can then relax in luxury or move straight on to your next challenge.

"The world can be your oyster!"