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10 Essential Steps Towards Selling Your Business

You’ve spent years cultivating it, but that seed of an idea you planted all that time ago has grown up, blossomed, and now it’s ready to be cut free. Sure, saying goodbye and selling your business can be a stressful, but it doesn’t have to be.

Below we explore 10 essential steps towards selling your business that’ll make the process as smooth as possible.

Step 1. Preparation

As a first step, you’ll need to get your company records in order. This includes information about your operations, industry and historical and projected finances. Work alongside your accountant and financial adviser to ensure the sale of your business is factored into your tax planning and longer-term financial plan. And while this whole process could take up to six months or more, it can be made much faster with help. Contact a trusted adviser if you’d like assistance.

Step 2. Valuation

An accurate valuation of your business is both a legal requirement and necessary for a successful sale. It’s calculated by applying the acronym EBITDA – Earnings before Interest, Taxes, Depreciation, and Amortization. Essentially, your business’ value will be the sum of these things. Other aspects, such as intellectual property, reputation and goodwill, will also play a role in determining the value. Get help from your financial division and advisory team to ensure you’re getting what your business is worth.

Step 3. Identifying Prospective Buyers

The best buyers are those who are currently in the market and seeking to make acquisitions. These are often strategic organisations, such as private equity firms. Contact your adviser to see who is in the market. Make a list and compare your best prospects.

Step 4. Contacting Prospective Buyers

If they haven’t already contacted you, your prospective buyer will need to be contacted. Your advisory team could do this job for you. But ensure the prospect signs a Confidentiality Agreement before they receive any specific information. You don’t want these details out in the open as it may affect the valuation of your business at sale.

Step 5. Responding to Buyers’ Questions

Buying a business is a big decision, and it’s not taken lightly. Prospects will undoubtedly have a barrage of questions, so do your homework and have your documents prepared. Work with your advisory team to best clarify any uncertainties swiftly and with good service, it’ll influence their buying mindset.

Step 6. Receipt of Letters of Intent

A letter of intent is a non-binding letter that outlines the price and structure of the proposed transaction. It’ll also specify the broad terms and conditions of the purchase. This forms the basis of the negotiation into the final stages.

Step 7. Negotiation of Final Letter of Intent

Some terms and conditions may be contested by the prospect and as such, they’ll need to be changed. Ensure your advisory team is in regular contact with the prospect so that this can be finalised as soon as possible.

Step 8. Buyer Due Diligence

We’re getting to the end of the process, so the buyer will want to review all your business’ relevant contracts. This includes legal, accounting, tax, financial, human resources, IT and real estate, among others. The buyer will also further investigate your products, customers, and any other outstanding issues, such as ligation or environmental, for example.

Step 9. Legal Documentation

Now you’re at the contractual point. This is when lawyers from both sides will negotiate the transaction, ensuring there are no irregularities. If there are issues, the contract may have to be redrawn.

Step 10. The Closing

The contract’s signed, funds have been transferred, and the business has changed hands. It’s no longer yours to worry about and you can celebrate all your achievements, moving on to your next project or just taking some time out to enjoy a well-earned break.


Selling your business can be a daunting experience. But if you stay on task and have the backing of a great advisory team, you can enjoy the process and be ready to start your after-business life.

Contact one of our trusted business advisors if you’d like further information about selling your business.


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Mitchell Turnbull
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