Phil Verity answers a readers question: I started my business in partnership 15 years ago. Can you advise me on selling my half of the business, I understand my partner has first refusal

When you first started your partnership, I wonder if you had a written partnership agreement drawn up? This would normally be drafted by a solicitor and would lay down details on the operation of the business between the two of you, including what would happen when one of you wanted to sell or retire. If you didn’t have such a written agreement, you may have had a verbal agreement which would give you guidelines.

If you have simply never discussed procedure or valuation, the answer to your question is that the sale of your share of the business can be negotiated now from scratch. The value of any business is simply the amount that a buyer is willing to pay for it and a seller willing to accept. Assets can give you some sort of guideline; in your case this includes your van, cash at the bank, any money owed to you by customers and less obviously your order book and customer list. There may be other assets which I can only guess at (tools & equipment, for example).

Depending on the value you are hoping to get, I would recommend that you ask a local accountant used to dealing with small businesses to help you set a value and negotiate on your behalf with your partner. This removes any emotion out of the negotiation and allows the accountant to protect your interest, which is not the same as that of your partner: you want to receive as much as possible, he wants to pay as little as possible.

Phil Verity is a partner at Mazars, the international accounting and business advisory firm, and Head of the Mid Corporate Market business line.