Steps to successfully selling your business

We’ve put together a checklist of things to consider when selling your business so you can achieve the best outcome.

Price it right

It is important that a business is properly valued and priced if you are to attract purchasers, but it should also achieve a price that represents a fair return for the work you have put into the business. Based on our knowledge of the market, we will appraise your business and advise you as to the range of prices being paid for similar businesses. 

Have up to date figures

Purchasers and their advisers will ask for up-to-date figures. If you are unable to provide them, there is a high probability that your business is not ready for sale. If at any time you are unable to supply information that a prudent purchaser would reasonably require then money will be coming off the table. If however you have all the current financial information readily available it sends a clear message that your business has been well run and you are ready to sell. 

Ensure purchasers feel comfortable

It’s important to demonstrate to a potential purchaser that this will be an easy business to take over.  As your business broker we prepare an Information Memorandum for your business which would normally include key information on the business such as background, what is does, products and profile of all key customers, suppliers and service providers, financial information and other relevant information on contracts, leases, staff and any other obligations. 

Have things looking good

Purchasers only buy businesses that are financially viable, stable and have good prospects. Businesses for sale are like homes for sale. Presentation counts! Make sure the entire premises are clean and tidy, not just the front of house. That includes the office and storage areas as well.

Be prepared to be honest

Tell it “warts and all”. If you lie about something or hide something and the purchaser finds out before sale settlement, you won’t have a purchaser any more. Most things come out sometime between an offer and completing due diligence. To avoid having money coming off the table later, or worse, having the sale fall over, deal with issues early in the piece.

Plan ahead and understand time-frames

Businesses generally take time to sell—many businesses can take up to a year to sell from the time you first engage a broker. Some take longer, some shorter, but it is months rather than weeks. Trying to sell in a hurry sends the wrong market signals and puts you in a weak position, which means you probably won’t achieve the best possible price. 

Have all the relevant information, and be able to talk to it

Purchasers respect vendors who know their business, and have representatives that know the business. They are far more likely to respect the asking price. Be prepared to discuss:

  • Profit and loss accounts from the previous 3-4 years
  • Abnormal or non-recurring costs in the accounts
  • Personal drawings (including stock, if relevant)
  • The lease on the premises
  • Leases on plant or equipment.
  • Your sales material, company literature
  • Staff
  • Add backs
  • The franchise agreement if it’s a franchise business, the franchisor and how the relationship works.

Next steps 

To discuss the specifics of how to get the best outcome for selling your business, contact one of our business broking team.