“I’d like to sell my business and move on to something new. What’s involved?”
For almost every business owner there will come a time to either close down their business, or sell it. If the business has value it’s always worth marketing it for sale.
In this blog I’ll focus on four things to do when you’re selling your business.
Don’t market until its ready for sale
If you want to get the best possible price and not waste time with tire-kickers make sure the business is ready for sale. This means:
the financial information should be complete – see your accountant first!
Putting together a business plan that will make a buyer feel confident
forecasts should be realistic
get rid of unnecessary assets
necessary assets are in good condition
make sure the intellectual property is protected eg trade marks are registered
legal documents are in order, especially the premises lease
customer and supplier contracts are locked in and can be transferred
employment compliance is fully up to date
obsolete securities are discharged (i.e. PPSA securities)
Get a valuation
You need to be realistic about what your business is worth in the market. A lot of businesses don’t sell because the owners have an inflated idea of their value. And remember, without you, the business may be worth less.
Hire a good business broker
A good business broker will be worth their commission. Ask for recommendations, and don’t chose a broker just because they promise the highest sale price. Using a broker to market the business means you will have time to focus on keeping your business running well. They can also help with due diligence on the purchaser – so you don’t waste your time.
Use a lawyer
An experienced business lawyer will:
help you get the business ready for sale
work with you and your broker to draft a good sale agreement
work through the settlement process with you to reduce any risk
If you’re thinking of selling the company that owns the business (i.e. a share sale) rather than just the business there will be some other issues to consider. Your lawyer and accountant can help here too.
If you’re thinking about selling up get in touch for an initial chat.
Photo by Lo Ken on Unsplash