Selling your business can be stressful. On top of all the financial and legal worries, there’s also the concern about the future of your staff and yourself.
With everything happening at once it’s easy to feel trapped under the weight of it all.
This practical checklist will give you a step-by-step guide with all the information you need to start down the long road of selling your business with confidence.
Too often businesses are sold for the wrong reasons. If you’re selling because you’re having financial difficulty or issues complying with government regulations, you should seek financial advice. The right advice can save you time and money, and it’s not as expensive as you think.
There are many different advisors out there, but the best ones take care of almost everything. Find a business broker which offers legal as well as business advice, it’ll make the experience much easier. Also, they have many other clients, some which may be interested in buying your business.
If you still want to sell following their advice, you’ll need an accurate valuation of your business.
Value your business
Make sure you get what your business is worth. The process can be complicated and time-consuming, but this can be made much simpler with help. Contact a good advisor. You won’t regret it.
Ensure you have a detailed record of your finances and assets. This includes financial statements, details of physical assets (e.g. equipment and stock) and other assets such as intellectual property (e.g. designs protected by copyright).
You should also dig out your legal information. Having details of all leases, insurance policies and registration papers such as your Australian Business Number (ABN) ready will help you in the long run.
Next, you’ll need your business profiles and plans. This includes details of market conditions, sales information and business history. It’ll make sure you get the true value of what your business is worth.
Information on your staff, suppliers and customers is also important. Buyers are more likely to be interested if they think you’ve been up-front and honest. They also value information which can make their job easier once they take over.
Find a buyer
Once you’ve got an accurate valuation, you’ll need to find a buyer. You can advertise a number of ways. Different methods include going through business brokers or real estate agents, online, through your existing networks (family, friends and colleagues), or in trade magazines.
Negotiate the sale
You’ve found a buyer, now it’s time to sell. You and the buyer have to agree on a few things in contract form before the sale goes through.
The contract will be prepared by an intermediary (often a solicitor). Both you and the buyer should get your solicitors to check the contract to ensure everything is in order before it’s signed. Ensure all the information is true, otherwise you might find yourself in court. Share all information with your solicitor and advisor to avoid this.
The contract will contain details of the sale. This includes the price, the deposit, the settling period and arrangements for existing staff. It will also contain information about relevant assets (e.g. fixtures), liabilities (money owed to other people or businesses) and the lease of the premises. Arrangements for staff and any trade restrictions will also be included.
After the sale
You may be subject to certain government taxes from the sale of your business. Check with your advisor or look online for information about this.
Ensure you transfer all relevant leases and licenses to the new owner, finalise your tax return and cancel your ABN. Your advisor and solicitor can help with this.
Most importantly, look after yourself. Selling your business can be a stressful time, so make sure you find ways to relax. And if you are suffering from stress, don’t do it silently. Seek psychological or financial assistance if needed.