The sale of your business is one of the most important decisions you will make in your life, so getting it right is critical. To achieve a good outcome and the results you seek, consider the following steps to sell your business successfully.
Get a qualified business valuation
Valuing your business accurately is essential if you don’t want to risk losing money by setting the wrong price. Business owners who seek to save money by not getting a business valuation risk setting a sale price that is emotionally driven. If it’s too high it might turn off potential buyers, or if it’s unnecessarily low it will keep you from cashing out at full value.
Determine the current worth of the business
Once a business valuation is complete, you can assess the gap that exists between what the business is worth compared with current sale price expectations, and whether to proceed with the business sale listing.
Develop a business improvement strategy
The valuation will provide a baseline value for the business and allow the owner to work with a business advisor to develop a strategy to improve its profitability and increase its value.
Get your paperwork in order
Ensue all record keeping is up to date, current financial statements are prepared and available to process, and make sure all tax lodgements and deadlines are up to date. A business that doesn’t have up to date financials available will be less attractive to prospective buyers and will result in delays in selling.
Show future & growth plans
Businesses that can present business & sales plans to show future opportunities for growth will attract more quality buyers.
Business that have well designed cashflow and financial forecasts with supporting comments will provide assurance and reduce risk for buyers, and can add $$$$ to your sale price.
Document your business systems
Have a full and detailed procedures manual covering all aspects of the business, with documented systems for sales, operations, employment, health and safety. This makes handover easy, which will be appealing for potential buyers.
Make sure your employment contracts are up to date and get all staff entitlements up to date. You don’t want any horrible surprises if you discover a staff member is owed a substantial amount of holiday pay, especially since this burden is likely to turn away someone who may want to take over the business.
Finalise any legal issues
Resolve any legal issues that may be current or pending. Buyers get very nervous if they discover any legal matters are unresolved.
Customer and supplier contracts are current
Having long term customer contracts in place will provide the buyer with confidence in your business and provide some security in terms of future income. Also, if a certain supplier is critical to the business operations, having a current secure supplier contract will reduce operational risk for buyers.
Check your Lease
Ensure your premises’ lease is up to date with options signed and in place and that the lease can be assigned to the new buyer without any complications – ask a lawyer if you are unsure.
Tax on sale
Ensure that you identify the tax implications of sale and speak with your accountant about the way to structure the sale to minimise your tax.
Find the best place to sell your business
Traditionally brokers are used by owners to list and sell their business but they can be expensive. The average business broker charges 5-12% of the sale price, resulting in $$$ commission being deducted from the proceeds on sale.
Money paid to brokers can be used to pay for an advisor to prepare your business for sale, who can equally help you deliver on your sale price when you can choose to sell your business privately.
A good private business sale site is No Agent Business (www.noagentbusiness.com.au), who offer people valuable assistance to sell their businesses privately. This means you won’t be liable for the commissions charged by Business Brokers and Real Estate Agents when selling or leasing your valuable assets.
They also offer 110% money back guarantee if you do not sell your business privately!
Make this process stress free and enjoy life after your business sale.