When you’re building your business, stepping away may be the last thing on your mind. Yet, for many founders and owners, a successful exit is the ultimate test of all you’ve achieved. Whether you’re planning to sell, welcome new investors, or transition leadership, one factor quietly but consistently underpins a smooth, profitable exit: your contracts.
At Looking Glass Solutions, we’ve seen first-hand that due diligence, the process any serious buyer or investor will follow, shines a bright light on your commercial foundations. Contracts and, in particular, Shareholder Agreements, play a central role. Here’s why being contract-ready is essential long before you reach the negotiating table.
What is Due Diligence – and Why Does It Matter?
Due diligence is a comprehensive review a buyer undertakes before committing to purchase or invest in a business. It’s their opportunity to ‘lift the bonnet’ on everything that matters: finances, operations, culture, intellectual property, and, crucially, your legal and commercial agreements.
For founders and business owners, it’s a process that can feel intrusive and overwhelming. Everything is scrutinised. Gaps, missing paperwork, conflicting contracts, or unclear ownership can raise red flags, slow things down, reduce your valuation, or even derail a deal entirely.
The Hidden Value in Contracts
While many see contracts as dry paperwork or a necessary evil, they’re actually proof that your business is well-run. Contracts set out rights, responsibilities, payment terms, protections, and boundaries. When these documents are clear, up-to-date, and easily accessible, you:
- – Demonstrate professionalism and preparedness
- Reduce risk (to both you and any future owner)
- Boost trust and confidence during negotiations
- Often increase your business’s market value
A serious buyer looks for calm, order, and clarity, not just profits. Your contract drawer tells the real story.
Why Shareholder Agreements Are Non-Negotiable
Shareholder Agreements are often overlooked, particularly by growing SMEs. Yet a clear, practical Shareholder Agreement is one of the most powerful tools you can provide in preparation for exit or succession. Here’s how:
They clarify ownership and exit options: A Shareholder Agreement lays out what happens if someone wants to sell their shares, leave the business, or resolve a disagreement. This certainty prevents legal wrangling and can make your business far more attractive, and valuable, to any buyer or investor.
They protect relationships: Exit can be emotional, especially in businesses built on friendship or family ties. Setting terms in writing while things are calm prevents misunderstandings when stakes are high.
They ensure business continuity: Clear agreements make it easier for new owners to step in or for leadership transitions to take place without unrest or disruption.
Contract Review: Small Changes, Big Impact
At Looking Glass Solutions, our Contract Review service goes beyond the basics. We use a Red/Amber/Green (RAG) system to flag risks, giving you a simple, jargon-free summary of where you stand. You get practical advice on what’s solid, what needs attention, and what to fix, making due diligence less daunting when the time comes.
Our reviews cover everything from client contracts and supplier agreements to those critical internal documents. It means when a buyer’s legal team starts asking questions, you’ve already got credible, plain-English answers.
Shoring Your Commercial Foundations
Preparing for sale or succession isn’t just a legal checklist. It’s about building a business that is robust, resilient, and ready for whatever comes next. At Looking Glass Solutions, our Commercial Foundations offering is specifically designed to get you due diligence-ready: bringing contracts up to date, refining Shareholder Agreements, and reducing the risk in your business to maximise that potential sale value.
If exit is even on the horizon, now is the right time to take stock. A few simple steps today can unlock major value tomorrow.
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Want to feel confident about your exit plans? Explore our Through to the End package to make sure you start the path in the right direction.
We help you simplify the complex, so you can lead your business forward, whatever’s next.