11 top tips on getting ready for the sale of your business
- Get your house in order. Ensure all relevant business and financial information and records are up to date and available for inspection. Prepare and have ready financial statements for at least the last 3 years.
- Ensure you ask your accountant about the best way to structure the sale. Is it a sale of shares or sale of all assets? There may be significant tax implications depending on what, how and when the sale takes place.
- Hire a good business broker, one that is experienced in your industry.
- Consider obtaining an independent industry specific business valuation, this can be very persuasive for potential buyers.
- Ensure that the most valuable parts of your business are recorded and transferable. Ensure key employees are contracted, with appropriate enforceable restraints should they leave. Ensure key client and supplier contracts and arrangements are recorded (in writing if possible).
- Ensure all business names, trademarks, copyright materials, trade secrets, client lists and other intellectual property are registered, identified and/or documented.
- Clean and update your premises and make sure you have strong occupation rights (if this is valuable). A solid lease with plenty of years and/or options remaining can be very important to a buyer. It could seriously devalue your business if a buyer will have to move or refurbish shortly after buying the business.
- Ensure your lawyer reviews and/or prepares the offer documentation and the sale of business agreement.
- Prepare a detailed employee schedule, including their remuneration, position, length of service, unpaid and accumulated leave, current wage, start date, age and whether they are full time, part time or casual.
- Prepare a detailed list of assets, plant and equipment that is to be sold with the business. Your accountant may be able to assist.
- If you have financed your business, be aware that the buyer will want all securities registered against your business and assets to be removed at or before settlement. Get started on the removal process early.
Please contact us if you are thinking about selling your business or have any questions.